MICROCAPITAL BRIEF: Hedge Fund Route One Buys 0.88% Equity Stake in India’s Bharat Financial Inclusion for $15m

US-based Route One Fund I LP recently spent approximately INR 990 million (USD 15.4 million) to purchase 0.88 percent of the shares of Bharat Financial Inclusion, a for-profit non-banking microfinance institution (MFI) in India, via an open market transaction. The transaction involved the purchase of 1.2 million shares at an average price of INR 809.14 (USD 12.56).

Bharat, formerly known as SKS Microfinance, is a for-profit microfinance institution that was launched in 1998 in India. Bharat converted into a public limited company in May 2009 and launched an initial public offering on July 28, 2010. It has since diversified into offering gold loans and microinsurance services but does not accept deposits. As of March 2016, Bharat reported total assets of INR 71 billion (USD 1 billion), loans totaling INR 52 billion (USD 771 million), 4.6 million active borrowers, a return on equity of 21.9 percent and a return on assets of 4.23 percent. Shares of Bharat trade on the Bombay Stock Exchange and India’s National Stock Exchange.

Route One Fund I was formed on November 1, 2010. No financial data on the fund are available.

By Christian Chartier, Research Associate

Sources and Additional Resources:

[1] “Route One Fund buys stake in Bharat Financial for Rs99 crore”, PTIFeed, http://indiatoday.intoday.in/story/route-one-fund-buys-stake-in-bharat-financial-for-rs-99-cr/1/954604.html

Bharat Financial Inclusion

National Stock Exchange of India

SEC data on Route One

MicroCapital coverage of Bharat Financial Inclusion, June 9, 2016

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