Warburg Intends To Buy 30% Stake In Vistaar Finance For $150 M
Vistaar, offers small company loans to retailers, manufacturing, and hotel establishments. According to its website, it has 196 branches across 12 Indian states and has so far lent more than $300 million.
The Indian small-business lender Vistaar Finance is in talks to receive a $150 million investment from the New York-based private equity company Warburg Pincus.
The sources claim that Warburg and Vistaar are in negotiations about a 30% ownership stake in the shadow lender. Deal negotiations are advanced, and Vistaar will be valued at about $450 million.
Non-banking financial services firms (NBFCs) like Vistaar operate in India; they lend less money than traditional banks do and primarily serve people in towns and villages.
The NBFC industry in India had assets totaling more than 54 trillion rupees by March 2021. Investors like Sequoia Capital and KKR have become interested in it as a result of its recent rise.
Saama Capital and Westbridge Capital, both of India, have already invested in Vistaar. Vistaar is receiving advice on the negotiations for the private equity deal from Kotak Mahindra Capital in India.
Source noted that the reason for Warburg's interest was because NBFCs are one of the biggest sectors for PE funds and have an established track record of performance.
Vistaar, which was founded in 2010, offers small company loans to retailers, manufacturing, and hotel establishments. According to its website, it has 196 branches across 12 Indian states and has so far lent more than $300 million.
It claims that business loans normally range from $1,200 to $60,000 and last five to ten years.
In addition to new shares being issued by Vistaar, Warburg might purchase current investors' shares, though it was unclear which ones might leave. Warburg has made more than $5 billion in investments in India during the last 20 years.
Its most recent investments have included consumer brands and startups like the headphones manufacturer boAt, the cosmetics and beauty company Good Glamm Group, and the ride-hailing app Ola. Avanse Financial Services and Fusion Microfinance are two of Warburg's Indian NBFC investments.