Mumbai: Samunnati Financial Intermediation and Services Pvt. Ltd, a non-banking financial company (NBFC) specializing in loans to farmers and entities engaged in agriculture, plans to raise around 250 crore (around $35 million) from private equity (PE) firms as it looks to grow its business, said two people aware of the development.

“Samunnati has appointed investment bank Kotak Mahindra Capital to help them raise fresh equity capital and they have initiated talks with various PE firms. They plan to dilute a minority stake through the latest fundraise. Samunnati is looking to raise around 200-250 crore to help them shore up capital base, scale up their loan book and expand their network," said the first person cited above, requesting anonymity as the talks are private.

The company was founded in 2014 by Anil Kumar S.G., a banker with over 27 years of experience in banks such as ICICI Bank and Canara Bank.

Samunnati has disbursed over 1,000 crore in loans till date and has an outstanding loan portfolio of 380 crore, according to its website.

The lender operates across 12 states catering to 34 agri value chains.

Samunnati focuses on five broad segments of agriculture—fresh fruits, vegetables and flowers; dairy, poultry and fishery; post-harvest food processing industry; agri inputs such as seeds, fertilizers, agro chemicals, machinery and farm equipment, small and micro irrigation; and field crops and horticulture commodities.

Samunnati’s latest fundraising efforts follow a 150 crore equity infusion in January 2018 in a round led by responsAbility Investments AG, with participation from existing investors Accel Partners and Elevar Equity. responsAbility is a Zurich-headquartered social impact investment firm with more than $3 billion in assets under management.

Emails sent to Samunnati’s founder Anil Kumar and Kotak Mahindra Capital did not elicit any response.

For the financial year 2017-18, Samunnati reported a consolidated revenue of 140.27 crore, as compared to a revenue of 24.43 crore in the previous fiscal, according to the company’s filings with the registrar of companies. It narrowed its consolidated net loss to 3.3 crore in 2017-18, from a loss of 7.7 crore a year earlier.

Rating agency Icra said in a report in September that Samunnati has witnessed strong growth on the back of its last fundraise, but will need regular funding to maintain its growth rate.

“Aided by the capital infusion ( 150 crore), the company’s managed portfolio, on a consolidated basis, grew more than three-fold (year-on-year) to about 342 crore as of June 2018, while maintaining a comfortable capitalization profile (managed gearing of 1.1x). Icra notes that although the current capitalization will be adequate to meet its near-term growth, the company may require regular capital to grow its book at a CAGR (compunded annual growth rate) of 90-100% over the next three years as internal generation is expected to remain relatively moderate," the report said.

Despite the recent liquidity fears in the NBFC space, several non-bank lenders have managed to raise funds from PE investors. NBFCs that have raised PE funding in recent months include SME lender Veritas Finance and commercial vehicle financiers Ess Kay Fincorp and Kogta Financial.

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