Promoters of Bharatiya Samruddhi Finance Limited (BSFL), the microfinance arm of BASIX Group, have announced that they will buy back a seven percent stake in BSFL, or roughly INR 850 million (USD 18 million), from existing share holders. A report from TheHinduBusinessLine.com quoted Mr Sajeev Viswanathan, Chief Executive Officer at BSFL, as saying, “We are doing this as we wish to have control over the business and to continue our own source of capital.” The promoters stake of BASIX will go up from 23 percent to 30 percent. The stake would be bought from Indian public charitable trust, ICICI Foundation for Inclusive Growth; microfinance investment vehicle (MIV), International Finance Corporation (IFC); and US financial institution, Shorecap International Limited. ICICI will most likely exit from the company by selling its 2.8 percent stake, while the others may sell just part of their stakes.
Post buy-back, the other major shareholders of BSFL would include Matrix Partners Investments India LLC (16.99 per cent), IFC (11.74 per cent), Lok Capital LLC (7.63 per cent) and Small Industries Development Bank of India (7.34 per cent).
According to the MIX Market, the microfinance information clearinghouse, BSFL had a gross loan portfolio worth over USD 73.6 million, total assets of USD 111 million, return on assets of 1.8 percent, return on equity of 15.6 percent and 499,000 active clients as of March 2009.
About Bharatiya Samruddhi Finance Limited (BSFL):
Bhartiya Samruddhi Finance Limited (BSFL) is a regulated non-banking finance company (NBFC) based in Hyderabad, India, that was founded in 1997. It is part of the BASIX Group, which provides financial services, agricultural/business development services and institutional development services to rural poor households and organizations that serve them. As of March 31, 2009, BSFL had a gross loan portfolio worth over USD 73.6 million, total assets of USD 111 million, return on assets of 1.8 percent, return on equity of 15.6 percent and 499,000 active clients.
About BASIX Group:
BASIX Group consists of several companies based in India that work in 15 states in the country and has also extended technical services to other countries in Asia and Africa. Companies in the group provide various services to the poor including financial services, institutional development services and agricultural and business development services. The holding company of the BASIX Group is Bhartiya Samruddhi Investments and Consulting Services, which started operations in India in 1996.
By Matthew Fox, Research Assistant
Sources and Additional Resources:
TheHinduBusinessLine.com: Basix Promoters to Buy Back 7% stake in Microfinance Arm, 9 July 2010: http://www.thehindubusinessline.com/2010/07/10/stories/2010071050310600.htm
MicroCapital Universe: Bharatiya Samruddhi Finance Limited (BSFL): https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Bhartiya+Samruddhi+Finance+Ltd+(BSFL)
MicroCapital Universe: BASIX Group: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=BASIX+Group
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