MICROCAPITAL BRIEF: Equitas Finance Borrows $16m in Non-Convertible Debentures (NCDs) from Franklin Templeton Mutual Funds

Equitas Finance Private Limited, subsidiary of Indian microlender Equitas Holdings Private Limited, has raised INR 1 billion (USD 16 million) from Franklin Templeton Mutual Funds, a US-based global investment firm. The funding was conveyed as a private placement of non-convertible debentures (NCDs).

S Bhaskar, Group Chief Financial Officer of Equitas, was quoted as saying, “Equitas has developed expertise in lending to the largely excluded segments such as used commercial vehicles being bought by driver turning owner and also micro [small and medium-sized enterprises] for the very small and largely informal entrepreneurs. The trust & support reposed by the marquee institutional investors like Franklin Templeton would go a long way in achieving our growth plans” [1].

As of March 2014, Equitas Holdings had total assets of INR 25.9 billion (USD 442.9 million) and had earned INR 741.5 million (USD 12.7 million) profit after tax during the previous quarter. Franklin Templeton has 225 schemes with a portfolio of INR 519 billion (USD 8 billion) in India and a portfolio of USD 844.4 billion worldwide. It has offices in 35 countries.

By Jeff Pierce, Research Associate

About Equitas Holdings Private Limited

Equitas Micro Finance is a non-deposit-taking microfinance institution (MFI) that was created in December 2007 and is based in Chennai, India. The objective of the company is to make credit available at a reasonable cost and in a transparent manner to the underbanked population of India. Equitas is active in seven states and union territories in India: Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Puducherry, Rajasthan and Tamil Nadu. Equitas aims to achieve sufficient returns on investment in order to attract private capital. Equitas Micro Finance is a unit of Equitas Holdings, which also controls Equitas Vehicle Finance and Equitas Housing Finance. As of March 2014, Equitas had total assets of INR 25.9 billion (USD 442.9 million) and had achieved INR 741.5 million (USD 12.7 million) profit after tax in the previous quarter.

About Franklin Templeton Investments

Franklin Templeton Investments is a US-based global investment firm that was founded in 1947. The firm specializes in mutual funds with products under the Franklin, Templeton, Mutual Series and Fiduciary brand names. In 1996 it expanded to India, and in 2002, Franklin Templeton India acquired Pioneer ITI, a fund house in India. It has 225 schemes with a portfolio of INR 519 billion (USD 8 billion) in India and a portfolio of USD 844.4 billion globally. It has offices in 35 countries.

Sources and Additional Resources:

[1] VCCircle News: “Equitas Finance raises $16M from Franklin Templeton Mutual Fund via NCDs,” Gupta, Bhawna, http://www.vccircle.com/news/finance/2015/03/02/equitas-finance-raises-16m-franklin-templeton-mutual-fund-ncds

MicroCapital Universe Profile: Equitas Holdings Private Limited

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Equitas+Holdings+Private+Limited

MicroCapital Universe Profile: Franklin Templeton Investments

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Franklin+Templeton+Investments

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