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MUMBAI: Belstar Microfinance Ltd, a subsidiary of Muthoot Finance Ltd, on Wednesday said it has signed definitive agreements to raise Rs350 crore of equity capital from new investor Affirma Capital and existing investors Muthoot Finance and Maj Invest. This equity raise is subject to obtaining required regulatory approvals.

Affirma Capital will invest Rs300 crore of the total round of Rs350 crore.

Since Muthoot Group’s initial capital infusion of Rs55.40 crore in 2016 for 57.16% stake, Belstar has expanded its branch network to 650 in 19 states with over Rs3,100 crore in assets under management.

George Alexander Muthoot, managing director, Muthoot Finance, said, “This funding will help Belstar grow its loan book and accomplish its vision of becoming a socially responsible microfinance institution working towards entrepreneurship and economic empowerment of women.

Kalpanaa Sankar, MD of Belstar, sai “We are pleased to welcome a marquee global investor like Affirma Capital joining us in our growth journey. Their investment in Belstar during such a difficult pandemic period validates the large market opportunity in microfinance space and Belstar’s potential to capitalise on the opportunities."

This is the second private equity investment in Belstar, with Maj Invest investing in 2018. Maj Invest is a Danish asset management company with about $17 billion under management, providing services in asset management and private equity, including financial inclusion business.

“It is our privilege to partner with the Muthoot Group and back Dr. Sankar and the Belstar management team, who have built a very strong and differentiated MFI franchise. We look forward to working closely with Belstar and assisting them in their next phase of growth," said Udai Dhawan, Partner at Affirma Capital.

InteQuant Advisors was the sole financial adviser to the transaction.

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