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Piramal Alternatives, the fund management division of the Piramal Group, has announced an investment of ₹600 crore in Annapurna Finance Private Ltd., a non-banking finance company focussed on microfinance. “The deal involved a combination of secondary purchase of shares and providing Tier-2 capital. The structured capital solution will help fuel the risk calibrated growth of the company’s assets under management,” the company said in a statement. “A seasoned player like Annapurna, having traversed multiple cycles, is well-positioned to capture the growth opportunity. Through Piramal Alternatives, we are committed to providing bespoke and value-accretive capital to support Annapurna’s growth aspirations in this promising sector,” Mr. Kikani said.

Piramal arm to invest ₹600 cr. in Annapurna Finance

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

The gross NPAs increased to 10.0% as on March 31, 2022 from 7.3% as on March 31, 2021. However, the same declined to 6.9% as on December 31, 2022 primarily on account of the write-offs in 9M FY2023.

AFPL has a strong investor base, which has helped it scale up its operations while maintaining adequate capitalization.  

The microfinance industry is prone to socio-political, climatic and operational risks, which could negatively impact its operations.

The issuer has made timely interest payments

Mr. Gobinda Chandra Pattanaik, MD 

Promoted by People’s Forum, a society registered in Odisha, AFPL is one of the largest NBFC-microfinance institutions (NBFC-MFIs) in India by AUM. It has an established track record of more than two decades, including microfinance lending through People’s Forum, in the microfinance space.

The company has good systems and processes, which have enabled it to sustainably increase its scale of operations over the years. Apart from a loan origination team, AFPL has a separate credit team and a risk management team. The entire disbursement process is cashless, and the company is increasingly focusing on promoting cashless collections from borrowers.

The company’s funding base is well diversified with a good mix of private banks, public sector banks, FIs and NBFCs. As on December 31, 2022, AFPL had funding relationships with more than 50 lenders. 

12.00%Annapurna Finance Private Limited 24 Jan 2030

ISIN:

INE515Q08267

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Piramal arm to invest ₹600 cr. in Annapurna Finance

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

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