Asirvad to secure PE funding; aims for IPO, Rs 10,000 crore AUM

Asirvad Microfinance, the micro-lending subsidiary of Manappuram Finance, is going for a major capital infusion to achieve an AUM of Rs 10,000 crore by FY22. It is in talks with private equity firms to raise Rs 500-600 crore this year and by FY21 it plans to go for IPO.

Having crossed an AUM of Rs 3,000 crore, Asirvad now looks at tripling its portfolio by FY22. It has prepared road map both in terms of capital infusion and business development to achieve the milestone. The company, in which Manappuram Finance owns 92 per cent stake, has been well-funded. Next month Manappuram Finance will be infusing Rs 150 crore into its microfinance subsidy.

Further, Asirvad is in talks with a few private equity players to raise around Rs 600 crore. “We plan to raise Rs 500 to 600 crore this year. The stake dilution will depend upon the valuation,” SV Raja Vaidyan-athan, MD of Asirvad Microfinance told Financial Chronicle.

This will help Asirvad to touch Rs 5,000 – Rs 6,000 crore AUM by FY21. Going ahead, Asirvad will tap the primary market in FY21. This will further fuel the growth towards an AUM of Rs 10,000 crore. 

On the business front, Asirvad will have presence in all the states by FY22. It is also planning to get into SME lending next year. “The ticket size of micro finance is low. SME lending will help us lend Rs 2 lakh to Rs 10 lakh per customer. However, as per the stipulation, SME lending cannot be more than 15 per cent of the total portfolio. In two years we will take SME lending to 15 per cent. But by then, microfinance portfolio too would have grown bigger,” he said.

Asirvad finance will initially launch SME lending in Tamil Nadu, Karnataka and parts of Maharashtra. It will also tap Andhra Pradesh and Telangana markets with SME lending. Later the product will be taken to other markets like Punjab, Uttar Pradesh and West Bengal. It will pick and choose the states where it wants to launch SME lending. “We have a large customer base which has moved up their business and are now in need of SME lending. These are customers who have been with us for more than six years. This is secured lending and hence will de-risk the portfolio to a great extent,” said Vaidyanathan.

Sangeetha G.