Janalakshmi Financial Services, the Bangalore-based NBFC focussed on lending to the urban poor, is understood to be closing in on a transaction to raise Rs 300 crore through the private equity route. The company, floated by social entrepreneur Ramesh Ramanathan, has so far raised a total of around Rs 250 crore and the fresh transaction is expected to be closed within the next month.
Janalakshmi Financial Services, which is aspiring for a banking licence in India, has been one of the aggressive micro-finance institutions and is understood to have a book of around Rs 1,000 crore. Global blue-chip investors including Citi Venture Capital International, Bellwether Microfinance Fund, Lok Capital, Michael & Susan Dell Foundation, Tree Line Investment Management, India Financial Inclusion Fund and Gawa Microfinance Fund are the existing investors. It is understood that the fresh fund raise will be through some of the existing investors with new funds joining in as well.
When contacted by Business Standard on the possible fund raise, Ramesh Ramanathan, chairman, Janalakshmi, said the existing business required money and he would be able to share details as and when the deal was signed.
During July 2012, Janalakshmi had announced that it has raised Series C funding of Rs 145 crore in two tranches of Rs 65 crore and Rs 80 crore during June 2011 and July 2012 respectively. As and when Janalakshmi structures the deal, it will be among the largest that an MFI in India would have raised through the private equity route. Ujjivan had early last year raised close to Rs 128 crore through the PE route, besides the one recently raised by Equitas.
Ramanathan, who was a banker earlier with Citibank in the US, after he settled in Bangalore, has been working for the betterment of society in India and has been involved with various stakeholders aggressively in an attempt to bring about a social change. As part of his efforts, Janalakshmi Financial Services has been designed in a 2-tier structure: for-profit operating companies for investors; and a (Section 25) not-for-profit holding company called Janalakshmi Social Services -- in which promoter stakes are held. Funds in Janalakshmi Social Services can only be used to address social issues.
