Mumbai: Suvidhaa Infoserve Pvt Ltd, a payments management company, is in the process of finalizing its acquisition of a small non-banking finance company (NBFC), founder and chairman, Paresh Rajde said.
“This is in order to acquire a lending license so that we can start our own lending business as well. Presently, we act as a platform for institutional lenders to give out loans to smaller customers,” Rajde said.
The NBFC is a small company with a minimal presence in India, he added, without disclosing the name of the target and other details. The acquisition will be finalized in the next few months.
As per the NBFC takeover guidelines released by the Reserve Bank of India (RBI) in July 2015, companies have to take prior permission of the regulator before selling a stake.
Any change in management would need to involve a public notice at least 30 days in advance, published in at least one leading national and one leading local vernacular newspaper. Such a notice will be given out by the NBFC as well as the acquirer, after receiving RBI approvals, the guidelines said.
According to Rajde, the company is now looking to enter the affordable housing and peer-to-peer lending business, to try and grow its customer base. While it is dependent on other banks and NBFCs for the loans, the company will also look at lending to these customers by itself.
As part of the affordable housing financing plans, Suvidhaa will try and get families that have a monthly income of at least Rs10,000 a month, where interest rates will range from 9-11%.
“Companies which are in the payments space will try and diversify their business by adding more lending products to their portfolio through such acquisitions. There seem to be no regulatory issues with this structure. The NBFC side of the business can take comfort from the data that the payments company can provide because it has a history of transactions,” said Abizer Diwanji, partner and head-financial services, EY.
Presently, Suvidhaa offers small loans to customers through a tie-up with Axis Bank, which it had announced last month. Under this product, the company provides loans starting from Rs15,000 at an annual interest rate of 22%. The loans, which are typically meant for borrowers in the unorganized sector, have an average term of 18 months, according to Rajde.
“So far, we have disbursed 1200 loans under this product, aggregating to about Rs2 crore,” Rajde added.
Prior to this, the company was providing services such as payments, remittances, and online railway ticket booking, among others.
In the year ended 31 March, Suvidhaa was able to support transactions worth Rs8,500 crore, where it earned Rs80-90 crore as transaction revenue, Rajde said. In the year ahead, the company’s transaction revenue is only expected to improve as lending typically yields a higher margin than payments and remittances.
Suvidhaa is also in the process of raising $10 million from new investors in its fourth round of funding, Rajde said. It raised $12 million from Japanese conglomerate Mitsui & Co. Ltd in its third round, five years ago.
Some of the investors in Suvidhaa include leading global venture capital firm Norwest Venture Partners and Reliance Assets Management Co. Ltd. Shapoorji Pallonji Mistry provided seed funding.
Suvidhaa, founded in 2007, featured among the 41 entities that applied for a payments bank license after the Reserve Bank of India (RBI) issued guidelines in November 2014. Its application was rejected as it failed to qualify on the parameters set by the RBI.
