India Business Excellence Fund–III, managed and advised by Motilal Oswal Private Equity (MOPE), has invested $25 million in a minority stake in Fincare Small Finance Bank (SFB) through a secondary acquisition.
Fincare SFB is a Bengaluru-based microfinance institution-non-banking financial company turned SFB. Fincare was one of the 10 applicants out of the total of 72 to receive Reserve Bank of India (RBI) approval for conversion into a SFB under the guidelines for this new class of banks issued by the RBI in 2015.
Before converting into a SFB, the microfinance lender was largely conducting business from two entities, Disha Microfin based in west India and Future Financial Services based in south India, under a single overarching management team. It started banking operations in July 2017.
This transaction will provide a partial exit to True North Fund V LLP, one of the key investors in Fincare, it said. Other investors in Fincare include TA Associates, LeapFrog Investments, and Tata Opportunities Fund among others.
“Over the past decade, microfinance has established itself as an asset class with potential for high growth and profitability. Based on our assessment, a SFB is the best platform to capitalize on this opportunity. Fincare has established itself as a pioneer in this space,” said Vishal Tulsyan, managing director and chief executive officer of MOPE.
