ICRA

Piramal Alternatives Trust (PAT), a wholly-owned subsidiary of Piramal Enterprises, will acquire a 10.4% stake in Annapurna Finance for ₹300 crore. Annapurna Finance is a non-banking financial company, headquartered in Odisha. It is one of the top 10 MFIs in India, with an asset under management of ₹9,233 crore as of September 2023, the company said in a regulatory filing. PAT has entered into an agreement today "to acquire 10.39 per cent stake in Annapurna Finance Private Limited (AFPL) for a cash consideration of ₹300 crore by way of a purchase of equity shares and subscription to optionally convertible debentures amounting to ₹300 crore," it added. The transaction is subject to receipt of requisite regulatory approval by PAT and is likely to be completed before 31 March 2024.

Piramal Enterprises to acquire 10.4% stake in Annapurna Finance for ₹300 crore

Annapurna Finance Pvt. Ltd., one of India's leading Non-Banking Financial Companies and Microfinance Institutions (NBFC-MFI), has entered into a landmark partnership with British International Investment (BII), the UK’s development finance institution and impact investor, and FinReach Solutions, a guarantee facilitation partner dedicated to enhancing credit availability to viable MSEs. This strategic alliance aims to empower India’s Micro and Small Enterprises (MSEs), which form the backbone of the country's economy. This partnership is particularly significant as it marks the first time a Development Finance Institution (DFI) has extended a credit guarantee to an NBFC-MFI in India. The agreement entails BII providing a first-of-its-kind credit guarantee to Annapurna Finance, with FinReach Solutions playing a pivotal role as the key enabler. The credit guarantee is expected to increase Annapurna Finance's loan book by INR 100 crore, thereby enhancing its capacity to provide financial services to over 4,000 underserved MSEs, particularly in regions where traditional financial services are limited, such as Eastern India.

Annapurna Finance Launches Credit Guarantee with BII and FinReach

The Reserve Bank has rejected the application of Annapurna Finance Private Limited for setting up a universal bank. In a statement on Friday, the RBI said it has completed the examination of the application of Annapurna Finance Private Limited for setting-up a universal bank. "Based on the assessment of the application as per the procedure laid down under extant guidelines, the applicant was not found suitable for granting of in-principle approval to set up a universal bank. The central bank had received the application under the guidelines for 'on tap' licensing of universal banks.

RBI rejects Annapurna Finance's application for setting up universal bank

AFPL’s asset quality and earnings weakened in FY25 due to overleveraging and socio-political disruptions. Gross NPAs fell to 2.7% due to write-offs and ARC sales; net NPAs stood at 1.0%. Credit costs rose to 3.2% of AMA, and net profit dropped to ₹69 crore.


AFPL remains exposed to political, social, and operational risks due to unsecured lending to highly leveraged marginal borrowers. Managing asset quality amid these challenges will depend on borrower selection, staff retention, and geographic diversification.


The issuer has made timely interest payments

Mr. Gobinda Chandra Pattanaik, MD 

Backed by People’s Forum, AFPL is a leading NBFC-MFI with 20+ years in microfinance. As of March 31, 2025, it reported ₹11,034 crore AUM (5-year CAGR: 22%), operating across 439 districts in 21 states with 1,636 branches and 29.3 lakh borrowers.


AFPL has a well-diversified funding base comprising bank loans (36%), subordinated debt (9%), FIs/NBFCs (5%), ECBs (14%), NCDs (3%), and DA (33%) as of March 31, 2025. It raised ₹4,248 crore in on-book borrowings in FY25 and maintains a strong funding pipeline to support growth.


Security Name: 12.00% Annapurna Finance Private Limited 24 Jan 2030

ISIN: INE515Q08267

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