MICROCAPITAL BRIEF: Investors Buy $173m in Equity in Fusion Microfinance of India; IPO Allows Exits by Early Shareholders, Promoters

In the run-up to the recent IPO by India’s Fusion Microfinance, 17 investors paid approximately INR 3.3 billion (USD 40 million) for equity stakes in the microlender. The actual IPO was oversubscribed by a factor of two, as Fusion raised INR 6 billion (USD 72 million) in fresh cash, and early investors and promotors sold shares for a total of INR 5 billion (USD 61 million). Among those selling their entire holdings in the company was the Dutch cooperative Oikocredit, which issued its first loan to Fusion in 2010 and first bought shares in the firm in 2015.

Fusion reported plans to use its fresh funds to strengthen its capital base. Its business spans individual and group microloans for enterprise and emergencies to unsecured cash-flow and asset-backed loans for small and medium-sized enterprises. The terms of its microloans range up to 25 months with annual interest rates around 22.5 percent plus fees of 1.25 percent plus tax.

Fusion serves 2.9 million customers – mainly women who live on low incomes in rural areas – via 270 branches in 19 states. Fusion’s assets under management total INR 73 billion (USD 880 million).

Sources and Additional Resources

The Indian Express article
https://indianexpress.com/article/business/market/final-day-subscription-status-fusion-micro-finance-ipo-8249695/

Fusion homepage
https://fusionmicrofinance.com

Oikocredit press release
https://www.oikocredit.coop/k/en/n2613/news/view/356103/9049/oikocredit-has-sold-its-equity-shares-in-the-public-listing-of-fusion-microfinance.html

Did you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Download a sample at https://www.microcapital.org/products-page/.

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