Janalakshmi Fin Services raises Rs 325cr; aims to cut debt

In an attempt to aid its expanding loan portfolio, Janalakshmi Financial Services raised Rs 325 crore. The non-banking microfinance institution sold its stake to Morgan Stanley PE Asia, Tata Capital Growth Fund and QRG Enterprises. This is in addition to Rs 200 crore that it received from City Venture Capital, India Financial Inclusion Fund and others, reports CNBC-TV18’s Vineetha Athrey.

For former Citigroup banker and the company’s current promoter-director Ramesh Ramanathan, raising money in tough environments seems to be child's play. Also read: Greed or fear? Rupee, market gloom may be overdone Janalakshmi’s networth now stands at Rs 525 crore. It pushes up the loan portfolio to Rs 1,200 crore. The company says that this fresh capital will be used to finance its aggressive expansion plans. VS Radhakrishnan, MD and CEO of Janalakshmi Financial Services said, "We will use this money for business expansion. So our portfolio will be doubled this year from Rs 1100 crore to Rs 2200 crore." However, the institution seems to be hungry for more. It plans to raise an additional debt of Rs 1,800 crore from banks. This could be through a mix of NCDs, ECBs and securitization. It hopes to increase its customer base from the 800,000 to 1.5 million by the end of this fiscal. Yet, it is also aware of the challenges to raise more funds given the RBI's moves to tighten liquidity. However, it hopes that the microfinance sector's priority status, and its own track record, will ensure its smooth flow. It is also relying on getting a banking license to help it offer a more comprehensive set of products, and boost growth.