IndoStar Capital Finance, a non-banking financial player on Wednesday said it has raised Rs 1,225 crore equity capital from Brookfield, an alternative asset management company.
The investment by Brookfield in the retail-focused NBFC is a combination of primary investment in equity shares and compulsorily convertible preference shares (CCPS).
With this investment, Brookfield will now become a co-supporter with 24.6 per cent stake, along with IndoStar Capital Mauritius having 45.2 per cent holding at present.
Indostar's Executive Vice-Chairman and CEO, R Sridhar, said in a release that, "This investment is a strong endorsement of IndoStar's business model, management capability, and quality of its franchise. This investment not only provides equity funding but also access to new debt financing via Brookfield's relationships with financial institutions."
Brookfield will also invest Rs 225 crore through a secondary purchase of shares from IndoStar Capital Mauritius.
Post this selection, IndoStar's capital adequacy ratio has improved to almost 40 per cent compared with 27 per cent before this equity infusion, the release said.
This is the first private equity deal by Brookfield within the financial services space within the country. IndoStar has assets under management of around Rs 10,200 crore and has nearly 70,000 customers.
Suryoday Small Finance Bank (SSFB), a scheduled commercial bank which provides short term financial loans to customers, has also closed an equity funding in the month of May 2020. The bank has raised Rs 62.14 crore from pre-existing investors, which include Gaja Capital, Kotak Life, Lok Capital, TIAA, and Kiran Vyapar.
Till now, the bank has opened around 400 accounts, and the target is to do a full-fledged launch from two branches — Tamil Nadu and Odisha. It will expand to around 100 branches within the next month. Another micro-lending company Satya MicroCapital Limited has raised Rs 105 crore in equity funding by Gojo & Company. This is one among the primary investments within the microfinance sector after the nationwide lockdown.