MICROCAPITAL BRIEF: Sequoia Capital Purchases 10% Equity Stake in Equitas, a Microfinance Institution (MFI) Based in India, From Kalpathi Investments for Over 12 Times the Original Price

Sequoia Capital, a venture capital fund that commits a portion of its portfolio on microfinance, has purchased a 10 percent stake in Equitas, a microfinance institution (MFI) based in India [1,2,3]. The deal, which was worth INR 44 crore, the equivalent of over USD 9.4 million, saw Sequoia purchase the stake formerly held by Kalpathi Investments, the investment company of entrepreneur Kalpathi Suresh [1,4]. Kalpathi Investments had previously purchased its share in Equitas for INR 3.5 crore, the equivalent of over USD 754,000, meaning that Kalpathi has sold the stake for over twelve times its original value after about two years [1]. Mape Advisory Group, an investment bank that provides advisory services for business transactions, arranged the deal between Sequoia and Kalpathi [1,5].

By Christopher Maggio, Research Assistant

About:
Equitas

Description:
Equitas is a microfinance institution (MFI) that was created in December 2007 and is located in Chennai, India. According to the MIX Market, as of November 2009, Equitas had a gross loan portfolio equivalent to USD 43 million, 339,158 active borrowers, and total assets equivalent to USD 61 million. Its return on assets (ROA) was reported as 1.52 percent and return on equity (ROE) as 4.02 percent.

Organization’s Website:
http://www.equitas.in/

Microfinance Information Exchange (MIX) Profile:
http://www.mixmarket.org/mfi/equitas

Contact Information:
Address:
4th Floor, Temple Tower, 672, Anna Salai, Nandanam
Chennai
Tamil Nadu
600035
India

Telephone:
+91 44 4299 5000

Fax:
+91 44 4299 5050

Additional Resources:
Equitas Banks on IBM to Drive Expansion Across the Country:
http://www.financialexpress.com/news/Equitas-banks-on-IBM-to-drive-expansion-across-the-country/553964/

MIX Market: Equitas Micro Finance India Pvt. Ltd.:
http://www.mixmarket.org/mfi/equitas/data

MicroCapital’s Microfinance Universe profile: Equitas

About:
Sequoia Capital

Description:
Sequoia Capital is a venture capital fund that allocates part of its portfolio to microfinance investments. Sequoia Capital’s most well-known investment is in SKS Microfinance, an Indian microfinance institution (MFI). It purchased a 10 percent stake in another Indian MFI, Equitas, in January of 2010.

Organization’s Website:
http://www.sequoiacap.com/

Just the Facts:
Country of Incorporation: United States
Year Founded: 1972
Area of Operation: Global
Instruments: Equity

Contact Information:
3000 Sand Hill Road, 4-250
Menlo Park, CA 94025
T: +1 650 854 3927
F: +1 650 854 2977

Additional Resources:

Sequoia Capital Leads USD 11.5mm Investment in SKS Microfinance based in India (April 2007)
https://www.microcapital.org/sequoia-capital-leads-usd-115mm-investment-in-sks-microfinance-based-in-india/

MicroCapital’s Microfinance Universe profile: Sequoia Capital

Bibliography:
[1] VC Circle article entitled ‘Sequoia picks up Kalpathi Investments’ 10% stake in Equitas’: http://www.vccircle.com/500/news/sequoia-buys-10-in-equitas-from-kalpathi-investments
[2] Sequoia Capital: http://www.sequoiacapital.com/
[3] Equitas: http://equitas.in/
[4] Kalpathi Invesments: http://www.kalpathiinvestments.com/
[5] Mape Advisory Group: http://www.mapegroup.com/

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