Move likely to catapult Svatantra to become the 2nd largest NBFC-MFI with a combined AUM of INR 12,409 Cr
In one of the biggest deals in the microfinance industry, Ananya Birla’s Svatantra Microfin Private Limited (Svatantra), has entered into a definitive agreement to acquire Chaitanya India Fin Credit Private Limited (Chaitanya), a wholly owned subsidiary of Navi Group (Navi). The transaction of INR 1,479 Cr is expected to be completed by the end of 2023, subject to receipt of regulatory approvals and customary closing adjustments.
The proposed acquisition is expected to transform the microfinance landscape, catapulting Svatantra into the second largest microfinance entity in India with a reach of more than 3.6 million active customers through 1,517 branches across 20 states and a combined AUM of INR 12,409 Cr as on March 31, 2023.
Svatantra and Chaitanya are new generation NBFC-MFIs with a strong track record of growth and profitability, leveraging technology to create impact and offer financial services to rural India.
Commenting on the development, Ms. Ananya Birla, Founder and Chairperson of Svatantra, said, “Over the years, the Indian Microfinance industry has been a catalyst in the profound transformation of the Indian financial services sector by democratising finance.” She added, “The proposed acquisition will propel Svatantra to a significant leadership position. The combined entity will command a substantial reach, enabling the delivery of a diverse array of financial services to our clients across a geographically diverse portfolio. We are committed to being a responsible lender, and I believe our synergistic strengths and shared ethos will accelerate our ongoing journey to create a unique, valuable and impactful financial services entity. I am extremely proud of the team at Svatantra and the relentless efforts they put in everyday towards our shared vision.”
“We are pleased to announce the proposed sale of Chaitanya to Svatantra,” said Navi Chairman and CEO, Mr. Sachin Bansal. “We have seen Chaitanya grow almost 6X in the last 4 years, making credit accessible to rural India. This transaction is in line with our strategic plan to focus on our digital-first businesses, as we continue our digital-first financial services through the Navi Group. We believe that Svatantra is a good fit for Chaitanya and that the company will continue to grow and prosper with the combined expertise of both teams. I am very proud of the hard work the team has put in to be able to achieve this exponential growth in such a short span. As they take on this legacy, I want to extend my best wishes to them for their future endeavours.”
JM Financial Limited acted as the exclusive financial advisor to Navi for this transaction.
About Svatantra Microfin Private Limited (Svatantra)
Svatantra was incorporated in 2012 by Ms. Ananya Birla. It started its operations in March 2013. In a short span Svatantra has emerged as the most differentiated process and technology-driven microfinance entity, which offers microcredit at affordable rates in the country. Svatantra today with a team of 7,000+ employees serve over 2.2 million rural customers across 19 states with an AUM of INR 7,499 Cr (as on March 31, 2023). Svatantra’s compounded growth rate is that of 118% (FY15-23). The organisation provides affordable financial and non-financial solutions to rural women who are entrepreneurs themselves. With a central aim of financial inclusion, Svatantra is the only MFI with 100% cashless disbursements, since inception, facilitating activation of bank accounts for its clients. The AA- rated organisation was awarded the best microfinance organisation of the year in 2021 and was placed in the top 30 best places to work in its segment by globally recognized Great Places To Work for two years in a row (2020 & 2022). In addition, Svatantra MHFC, her micro housing arm, is the only housing institution to focus on the EWS/LIG segment, and to have a completely branchless model.
About Chaitanya India Fin Credit Private Limited (Chaitanya)
Chaitanya, founded in 2009, was acquired by Sachin Bansal in October 2019 (along with its parent entity, now called Navi Finserv Limited) for about 150 Cr. Chaitanya has focused on servicing rural India digitally with support from its parent company Navi, and making credit accessible to all of rural India. Since the acquisition Chaitanya’s business has seen a compounded growth rate of 77% YoY, increasing its book size from about INR 900 Cr in March 2020 to over INR 4900 Cr in March 31, 2023. Chaitanya services 1.4 million customers across 12 states in India with an AUM of over INR 4,900 Cr. It had a net worth of INR 721 Cr as on March 31, 2023 which was shored up through a further capital raise of INR 75 Cr in June 2023. Chaitanya, currently A rated (CRISIL), has moved up 4 notches in its credit rating in less than 4 years through the help of its high-quality team of 6,000+ employees. Chaitanya is one of the few MFIs that was not impacted by COVID, in fact it continued to grow at a rate faster than the industry average. Despite the exponential growth in business Chaitanya maintains one of the best collection efficiencies in the industry.
About Navi Group (Navi)
Adopting a mobile-first approach, utilising strong in-house technology and product expertise, Navi is building customer-centric financial products. It is uniquely positioned as the leading end-to-end digital ecosystem player with complete control over customer experience in all three non-payments financial service offerings – lending, insurance, and asset management. Co-founded by Sachin Bansal and Ankit Agarwal, Navi is headquartered in Bangalore.