Manappuram buys majority stake in ISFC
Manappuram Finance acquires an 85% stake in Indian School Finance Co. (ISFC) from existing impact investors Gray Matters Capital and Caspian
Mumbai: Manappuram Finance Ltd, Kerala-based gold finance non-banking financial company (NBFC), has acquired an 85% stake in Indian School Finance Co. (ISFC) from existing impact investors Gray Matters Capital and Caspian, the companies said in a statement.
Gray Matters Capital is selling its 81.92% stake in the Delhi-based ISFC, while Caspian, also an impact focused investor, will also exit the company, selling its 3.48% stake.
The deal values the education sector focused lender at ₹248.5 crore, the statement said. The transaction is subject to customary closing conditions and regulatory approvals.
Deloitte Touche Tohmatsu India LLP acted as exclusive financial adviser and Wadia Ghandy & Co. acted as legal adviser to Gray Matters Capital, Caspian and ISFC.
In November, Mint had reported that ISFC was looking to raise up to $30-35 million and had appointed Deliotte to advise it on the fund-raise.
Incubated in 2009 by Gray Matters Capital, ISFC focuses exclusively on funding education institutions to meet their infrastructure requirements and is a financier to affordable private schools in India. It had raised $6 million as part of Series A funding from Gray Matters Capital in October 2016.
“With ISFC, Gray Matters Capital pioneered the private school ﬁnance sector in India. With our investment in ISFC, we enabled a dynamic ecosystem of borrowers and lenders in the private school sector with its focus on quality and access, underscoring our credence of being ecosystem investors”, said Ragini Bajaj Chaudhary, India chief executive officer at Gray Matters Capital.
ISFC had assets under management (AUM) of ₹522.59 crore as of 31 March 2018. Currently ISFC serves over 2.6 million students through over 4,000 institutional clients. It has a country-wide footprint spanning 116 locations across 15 states through a hub and spoke model and with over 300 employees.
“ISFC was able to demonstrate that affordable private schools can be a bankable and high impact asset class. With affordable private schools flourishing, the entire ecosystem of products and services to improve education outcomes has evolved. The expectation is that all of these initiatives will enable inter-generational impact.” said Ravi Narasimham, investment director at Caspian Impact Investment Adviser.