Piramal Alternatives, the fund management division of Piramal Group, has announced an investment of Rs 600 crore ($75 million) in microfinance company Annapurna Finance.
While the deal specifics were not disclosed, sources close to the development said the company has picked up a 9.85% stake in Annapurna through secondary equity deals for Rs 300 crore. Additionally, Piramal Alternatives has subscribed to tier-2 convertible bonds of the microfinance company.
The structured capital solution will help fuel the risk calibrated growth of the company’s assets under management, a statement said on Monday.
Headquartered in Odisha, Annapurna Finance has assets under management of over $1.25 billion as on March 31. It has diversified into financing micro, small and medium-sized enterprises, and has a presence in 20 states with 1,372 branches.
“Microfinance as a retail asset class has grown at CAGR of 32% over the last decade and is expected to continue the high growth trajectory,” Kalpesh Kikani, chief executive officer, Piramal Alternatives.
Unitus Capital acted as the exclusive financial advisor to Annapurna Finance.
“The growth capital from Piramal Alternatives will provide the necessary ammunition for business diversification and help consolidate our leadership position in key markets,” Gobinda Chandra Pattanaik, MD & CEO, Annapurna Finance, said