Muthoot Microfin raises Rs 130 crore from US-based PE fund creation

Mumbai: Muthoot Microfin, a unit of Kochi-based Muthoot Pappachan Group, has raised Rs 130 crore growth capital from US-based private equity fund Creation Investments Capital Management LLC as it plans to expand its network and reach across the country.

Post infusion, the Chicago-based PE fund will hold 11% stake in Muthoot Microfin, it said in a statement. The funds will be used for business expansion in Bihar, Uttar Pradesh, Odisha, Chhattisgarh, Haryana and Punjab, in addition to the 10 existing states where Muthoot Microfin operates.

ET had reported on December 12 last year that Muthoot was in talks with Creation Investments Capital Management to raise funds. Muthoot Group has committed to infuse Rs 150 crore capital into the microfin unit by March 2018. The company plans to open 500 new branches in the next three years to expand its footprint across India. The capital will also be used to adopt the most advanced technology to enable reach to the last mile and to make cashless transactions for micro loans. The capital will be mainly used for expansion and investment in technology and digitisation, the company said. Creation Investments Capital Management focuses on financial services in emerging markets. It manages 13 investment platforms in financial institutions in South America, South Asia, Southeast Asia and Eastern Europe, according to its website.