Amitabh Chaturvedi, former chief executive of scam-hit Karvy Stock Broking, who stepped down from the boards of Karvy group entities recently, said he was at an advanced stage of buyouts for his family office-owned non-banking finance company Purple Finance to turn it into a digital small finance bank.
Chaturvedi, who was earlier associated with the Essel group’s financial services business, Reliance Capital, ICICI Bank and Dhanalaxmi Bank, is aiming at multiple acquisitions in the space of financial services both for attaining the size of business as well as for listing on bourses.
“We will convert, merge Purple Finance for listing first,” Chaturvedi told Moneycontrol, adding that acquisition of a listed entity could be announced in a couple of weeks. He refused to disclose the identity of the target company citing regulatory issues.
“The intention is to convert the unlisted (Purple Finance), make it listed and raise bigger amounts of capital and then become a small finance bank,” he said.
Chaturvedi views that cooperative banks are marred with issues like governance and asset quality and the Reserve Bank of India will turn harsh on them going forward. “We feel we will be able to occupy that space (of cooperative banks) with good examples like AU, Equitas, Utkarsh and Sarvodaya Bank,” he said. “We will start first as an NBFC and create a company of Rs 500-600 crore of net worth and then approach the Reserve Bank of India for a small bank licence.”
Purple Finance, an MSME-focused NBFC with a ticket size of Rs 4-10 lakh of secured lending, is also in talks to raise $8-10 million of funds from High Networth Individuals and look at the next fundraising of around Rs 150 crore sometime next year.
Chaturvedi said Purple Finance will predominantly focus on tier-3 and tier-4 cities mainly in three states of Maharashtra, Gujarat and Odisha. “We would like to have our base in Bhubaneswar as we have found that there is no large MSME-focused NBFC in Bhubaneswar. So, whenever we convert our NBFC into a small finance banking licence, it may help us.”
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