L&T Finance unit to raise $550 million in IFC-led investment round

A unit of L&T Finance Holdings Ltd will raise $550 million in an investment round led by World Bank Group member International Finance Corporation (IFC), the financial holding company said on Thursday.

BNP Paribas, Citibank, and DBS Bank Ltd are also anchoring the round, which will see L&T Finance raise $275 million in the first tranche. IFC will bring in $125 million in the first round, the company said in statement.

L&T Finance, a part of India's stressed non-banking financial companies (NBFC), will use IFC's funds to expand its farm equipment finance book by giving loans to farmers to buy equipment and modernise farming.

"NBFCs have a crucial role to play in financial inclusion in India," Dinanath Dubhashi, managing director and CEO of L&T Finance Holdings said in a statement.

"Lending scientifically and methodically to customers who do not have access to last-mile credit is the next growth opportunity for NBFCs," he said

Indian non-banking financial companies are also strained for funds due to a liquidity crisis, and have prompted the so-called shadow banks to look for funding overseas.

In May, Cholamandalam Investment and Finance Company Ltd said it would raise $222 million in debt funds in an IFC-led investment round.