Warburg Pincus acquires over 90% stake in Vistaar Finance

Private equity firm Warburg Pincus has acquired a controlling stake in Vistaar Finance, an NBFC lending to micro, small and medium enterprises in India, the firm said.

Warburg Pincus has acquired over 90% stake for $250 million, through a combination of primary and secondary shares.

Former ICICI Bank executive Avijit Saha will be co-investing alongside Warburg Pincus and has been appointed chief executive officer.

“India is on course to becoming a $5 trillion economy over the next few years with the MSME sector playing a key role in achieving this goal. Warburg Pincus sees a significant opportunity in this space. Avijit has a long and successful track record in areas of rural, retail banking and SME credit. He also brings great strengths in building and scaling different business models, and we are excited to partner with Avijit in the further build-out of the Vistaar platform,” Narendra Ostawal, managing director, Warburg Pincus said.

Vistaar operates in 12 states, has around 40,000 customers, and more than 2,500 employees, and manages assets under management (AUM) of ₹3,150 crore as of March 2023. Post the transaction, Vistaar has a net worth of ₹1,210 crore with a capital adequacy of 37%, the company said.

Saha, a 30-year banking veteran was previously the head of rural and inclusive banking and president at ICICI Foundation.

“As Vistaar embarks on its next phase of growth, we will continue to build deeper understanding of specific customer segments and fulfil their financial needs through customised products,” Saha said.

Kotak Investment Banking acted as the exclusive financial advisor to this transaction.

Before ICICI, he worked at ICI Paints Ltd., Gurgaon, where he served as the business head for Refinish Business.

He is also a nominee director in FINO Payment Bank, and a nominee director in National E-Repository Limited (NERL).

Brahmanand Hegde and Ramakrishna Nishtala, the Founders of Vistaar Finance will be retaining a small portion of their shares post this transaction.

“It is a matter of great pride for us to have taken Vistaar Finance from being just an idea to becoming a leading NBFC in the MSME space. We have built this leading platform of MSME lending, over the last thirteen years, and we are delighted to hand over the baton to Avijit Saha to take it further to the next level of growth, supported by Warburg Pincus,” the duo said in a joint statement.

Other early investors in the company include Elevar Equity, Omidyar Network India, Saama Capital and Westbridge Capital have exited with this deal.

After starting operations in April 2010, Benguluru-based Vistaar finance provides secured loans to micro, small and medium enterprises across 12 states with more than 200 branches and over 2,500 employees.

The company provides 100% secured lending across ticket size categories through business and housing loans and targets small businesses such as shops, small manufacturing units, power looms, kirana /general shops, and home-based industries, which do not have access to organised funding for growth, the firm said.