Ananya Birla’s Svatantra MicroFin buys out Sachin Bansal’s microfinance business

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Transactions are getting noisy in microfinance. Recently completed is the acquisition of Chaitanya India Fin Credit led by Sachin Bansal by Svatantra MicroFin Private Limited. With a size of around Rs 1,000 crore, as per sources, this is one of the biggest deals in the unlisted microfinance sector in recent years. The acquisition is awaiting regulatory approval from the Reserve Bank of India.

Svatantra MicroFin is being promoted by Kumar Mangalam Birla’s daughter, Ananya Birla, who founded the company in 2012. The acquisition of Chaitanya is also Svatantra’s largest deal to date since its inception and is the second acquisition since 2018, when Micro Housing bought the $300 financing. crore rupees.

Emails to Chaitanya India Fin Credit and Svatantra MicroFin remained unanswered at the time of publication.

Bansal exit

About a year after the Reserve Bank of India rejected Chaitanya’s application for a global banking licence, Bansal began exploring options for exiting the company. The MFI’s business did not fit into its general operating scheme.

“Chaitanya is among the oldest MFIs and has the freshness that Bansal needs to get a banking license. After the FBI denied his application, there wasn’t much reason to stay put with Chaitanya,” said a person familiar with the matter. “MFI is a very niche business on the street and does not complete the kind of work done that Navi Finserv wants to pursue.”

Apparently, Bansal, who had big plans in financial services, is currently revamping Navi’s operations and business model. He founded Navi Technologies (now Navi Finserv) in 2018, within months of his exit from Flipkart. Sachin Bansal acquired Chaitanya in September 2019 from its co-founders, Anand Rao and Samit Shetty, for ₹739 crore.

transaction dynamics

At Rs 1,000 crore, the valuation works out at about 1.3 times FY23 price to book value. This is at a slight discount to the listed microfinance companies. The transaction will help Svatantra establish itself as the second largest player among NBFC MFIs, with combined assets under management of approximately Rs. 11,000 crore post acquisition, based on FY23 financials.