Advent, Multiples invest $230 mn in Ananya Birla’s Svatantra

Global private equity (PE) investor Advent International and leading Indian PE firm Multiples have invested $230 million in Ananya Birla’s Svatantra Microfin Pvt. Ltd, marking the largest such funding in India’s microfinance sector.

The funding round follows Svatantra’s acquisition of Chaitanya India Fin Credit Ltd in November last year.

Following the completion of the proposed deal and merger with Chaitanya, the combined entity will be among the largest non-banking microfinance companies in India, Advent said, adding that the promoter group, led by Birla, “will continue to hold a significant majority stake.”

“This investment by Advent and Multiples marks a momentous occasion for us, and will propel us towards our goal of becoming the foremost and most impactful microfinance institution, creating a conducive environment for entrepreneurs who fuel India’s growth story,” Ananya Birla, chairperson of Svatantra, said in a statement.

Svatantra, which began operations in 2013, offers financial and non-financial solutions to women entrepreneurs. Together with its wholly owned subsidiary Chaitanya, Svatantra has a team of more than 17,000 employees and serves over 4.2 million customers across 20 states, according to the statement.

“We are thrilled to announce Advent’s investment in Svatantra. We believe the microfinance sector serves as a cornerstone for financial inclusion for women entrepreneurs in rural areas, and Svatantra is uniquely placed to create one of the largest and most resilient microfinance institutions,” said Shweta Jalan, managing partner at Advent International.

The transaction awaits clearance from regulatory authorities, including the Reserve Bank of India and the Competition Commission of India.

“We are delighted to support Birla in building Svatantra to be the best-in-class institution delivering inclusion at scale. In line with Multiples’ ethos, we look forward to partnering the Svatantra team in its journey,” said Renuka Ramnath, managing director and chief executive officer at Multiples.

Advent, which has been investing in India since 2007, has committed about $6 billion across 18 investments thus far, the company said. It has pledged about $1.2 billion in the financial services sector across six transactions, including the Svatantra deal.

In the past, Advent has invested in Yes Bank, Aditya Birla Capital, KreditBee, ASK Investment Managers Pvt. Ltd, and CAMS.

Multiples has a strong track record of investing in the financial services sector and has investments in  Cholamandalam Finance, Veritas Finance, APAC Financial Services, Acko Tech, Niyo, India’s largest power exchange IEX, and RBL Bank.