Kinara Capital raises Rs 96 crore fund led by Gaja Capital

Visage Holdings and Finance, which owns and operates Non-Banking Finance Company (NBFC) Kinara Capital, has raised Rs 96 crore in a funding led by private equity firm Gaja Capital.

According to a report by the Economics Times, the funding round also saw participation from Spanish impact investment firm Gawa Capital and Kinara's existing one and Michael, Susan Dell Foundation besides Unitus Impact Fund.

The latest round of funding provides an exit to existing investor Shriram City Union Finance. Under the terms of the deal, Bengaluru-based Kinara will receive about Rs 70 crore as primary equity funding, while the remaining amount will go to Shriram City Union Finance, for its two-year-old investment.  

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Gopal Jain, the managing partner of Gaja Capital, confirmed the news but declined to disclose the exact stake picked by the investors and the valuation of the NBFC, even after the closure of the round.

"At present, there are only a few lenders in the market doing work what Kinara does and they are possibly amongst the fastest-growing small loans companies in the country right now,'' Jain said.

Currently, NBFC operates across Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Tamil Nadu and Telangana.

Kinara was founded in 2011 by Hardika Shah, the company offers loans, in between 1 lakh to 15 lakh to MSME's (micro and small medium enterprises) to focus more on the manufacturing sector, narrowing the gap between microfinance and commercial capital. The company is also planning to expand its footprint.

"We plan on using the proceeds primarily towards not only expanding our footprints but also going deeper in our existing geographies", said Hardik Shah founder and CEO of Kinara Capital told the newspaper.

The investment in Kinara Capital is the second such by Gaja Capital in the financial inclusion space. In September 2016, the private equity firm had invested Rs 30 crore in small finance bank Suryoday Small Finance Bank.

According to a report, at present 171 banks are operating in India with 76,000 branches and over 12,000 NBFCs (non-banking financial companies). There are 26 million small enterprises in India employing 60 million people. Only about 5% of these enterprises have access to the capital they require. Lending to MSMEs has repeatedly been emphasized as priority sector lending by the Reserve Bank of India (RBI).

Kinara Capital: Website