BackGeneral Atlantic pledges $100 million to finance Karvy Fintech’s expansion plans
Karvy looks to diversify into other areas of biz, while expanding its global client base, especially in SE Asian nationsGeneral Atlantic, which took a majority stake in Karvy Fintech last November, plans to commit more capital for capital expenditure purpose as well as for inorganic growt
PremiumMUMBAI : Private equity firm General Atlantic has pledged to invest at least $100 million to fund growth and expansion plans of its portfolio firm Karvy Fintech Pvt. Ltd.
The financial services firm offers end-to-end services to investors and distributors of mutual funds. It also provides corporate registry services, back-office operations and data processing services, besides being a central record-keeping agency under the National Pension System.
General Atlantic, which took a majority stake in Karvy Fintech last November, plans to commit more capital for capital expenditure purpose as well as for inorganic growth.
“General Atlantic has a commitment to the company in the form of a line of $100 million, which Karvy can draw upon, if and when required, both for investing in capital expenditure (capex) and for making acquisitions," Shantanu Rastogi, managing director, General Atlantic said.
“We are in the process of making a few acquisitions, which will be funded from Karvy’s internal accruals. We are also willing to put in far more if a large acquisition opportunity comes about."
Karvy Fintech is looking to diversify into other areas, while it expands its global client base, especially in South-East Asian countries including Malaysia, Maldives, Philippines and Thailand.
“While mutual funds will remain one of the important components of the business, there will be several other components such as global business and global fund services and back-office services for pension funds, private retirement schemes and employee provident funds, which will also form a significant share of our sales," said Ganesh V., managing director and chief executive, Karvy Fintech.
The company is also working on insurance services and the alternate funds space, he said. While the share of mutual funds transfer agency business has fallen from 72% in 2017-18 to 60% in fiscal 2019, sales at ₹441 crore have more than doubled in the past five years.
“We aspire to build a transaction processing platform and that’s the diversification you will see, on both asset class and geographical expansion in South-East Asia and some other countries," said Rajat Sood, principal, General Atlantic.
International business comprised about 15% of revenue in fiscal 2019 at Karvy, which counts top global financial services firms such as Manulife Financial Corp., Prudential plc, Templeton Financial Group, Aberdeen Group and Principal Financial Group as its clients.
“To give you a sense of scale, across all these asset classes, we manage $100 billion of assets, servicing almost 100 clients across India and South-East Asia, and process nearly 100 million transactions for them annually," Rastogi said.
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