Sunday, June 1, 2025
  • Login
Euro Times
No Result
View All Result
  • Home
  • Finance
  • Business
  • World
  • Politics
  • Markets
  • Stock Market
  • Cryptocurrency
  • Investing
  • Health
  • Technology
  • Home
  • Finance
  • Business
  • World
  • Politics
  • Markets
  • Stock Market
  • Cryptocurrency
  • Investing
  • Health
  • Technology
Euro Times
No Result
View All Result

IPO-Bound Fusion Microfinance Plans Secured Loan Arm For SMEs

by PTI
October 30, 2022
in Business
Reading Time: 3 mins read
A A
0
Home Business
Share on FacebookShare on Twitter


The IPO-bound Fusion Microfinance, which has been piloting a small business-focused secured lending book, is commercially launching it from next month as it seeks to fortify its secured portfolio and also drive faster growth.

Microfinance is typically small ticket loans, up to Rs 50,000 per borrower and is lent only to women through their self help groups and the loan is fully unsecured/without collaterals.

As against this, the New Delhi-based Fusion, backed by global private equity major Warburg Pincus and is the largest in terms of customer base and the second largest when it comes to loan book, wants to drive a secured business but only targeted at small businesses, which need not be run by women alone.

Fusion’s Rs 1,100-crore initial share sale — Rs 600 crore in fresh share sale and the rest via an offer-for-sale by promoter families and existing external investors — is opening next Wednesday at a price band of Rs 350-368/share.

Those selling shares in the OFS are Devesh Sachdev (founder and chairman of the MFI), his wife Mini Sachdev, Honey Rose Investment and two funds of Creation Investments Fusion, the Dutch impact investor Oikocredit Ecumenical Development Co-operative Society, and Global Financial Inclusion Fund. Of these, Honey Rose and Creation Investments are funds owned by Warburg Pincus which entered the MFI in 2018 with a Rs 520 crore funding.

“We’ve been lending to MSMEs for some time now and currently have Rs 200 crore assets under management. This is a fully secured loan and we give up to Rs 3.25 lakh to borrowers most of whom are existing borrowers. Post-IPO, we want to scale this book up and will be hiving off as separate NBFC but will remain part of the parent Fusion,” Sachdev told PTI over the weekend.

“So far, we’ve been using our own capital for onward lending through this but once we separately launch the business we’ll borrow separately from banks, wherein we will get funds at a marginally cheaper rate, as banks are only willing to lend/co-lend to MSMEs for one and for another this is a fully secured book,” he added.

Currently, they are lending through this model at the MFI rate which is upwards of 22% on which the lender earns a margin of over 11% as its cost of fund is just about 10.10%.

May be once we are get larger we can lower the rates for these borrowers as then we will also be borrowing separately for this from banks, he said.

Fusion’s current loan book is a shade less than Rs 7,400 crore — as of June 2022 in an industry that has an AUM of $35 billion — of this a tad over Rs 200 crore is the MSME book, he said. Fusion has close to 970 branches spread across 377 districts in 19 states but most of them are concentrated in Bihar and UP, and it employs close to 10,000 people.

Fusion has one of the best asset quality in the industry with a GNPA of 3.67% and an NNPA of 1.35% and a provision coverage ratio of 96, as of June.

The MSME vertical already has 70 branches manned by a 400-member team and this will go up as we scale up, he said, adding already has a 6,000 strong customer base, he said.

On the asset quality of this vertical, Sachdev said this is as good as the MFI book with the net NPA being only at 1.29% as the loan to value against the collateral which could be the shop/plant/other assets, is only 65-70%.

The highly cluttered MFI space is led by CreditAccess Grameen (which is also the largest in terms of AUM), Fusion, Asirvad Microfinance, Muthoot Microfin, Annapurna Finance, Samasta Microfinance, Satin Creditcare Network, Svatantra Microfin, Spandana Sphoorty Financial, and Belstar Microfinance.

Pre-offer Honey Rose Investment (Warburg) directly owns 48.65% in the company and the two Creation Investments Fusion funds, Oikocredit Ecumenical Development, and Global Financial Inclusion Fund holding another 36.56% and the Sachdevs 8.21%, taking the total to 85.21%. Post issue Warburg will pare 12% and Sachdevs under 1% to take their stake to 7.5%.





Source link

Tags: armFusionIPOBoundloanMicrofinanceplansSecuredSMEs
Previous Post

SK hynix (HXSCF) Q3 2022 Earnings Call Transcript

Next Post

Top Wall Street analysts say buy stocks like Texas Instruments

Related Posts

DRDO to soon issue EOI for AMCA, HAL getting ready to bid through a consortium

DRDO to soon issue EOI for AMCA, HAL getting ready to bid through a consortium

by Euro Times
June 1, 2025
0

Defence Analysis and Growth Organisation’s (DRDO’s) Aeronautical Growth Company (ADA) is more likely to concern an expression of curiosity in...

Aegis Vopak Terminals, The Leela IPOs to list on Monday: Here’s what GMP indicates

Aegis Vopak Terminals, The Leela IPOs to list on Monday: Here’s what GMP indicates

by Navdeep Singh
June 1, 2025
0

Investor sentiment can be in concentrate on Monday, June 2, as Aegis Vopak Terminals and The Leela Palaces (Schloss Bangalore)...

Dingdong Stock: Steady Growth Amid Margin Pressure, Waiting Better Entry Point (NYSE:DDL)

Dingdong Stock: Steady Growth Amid Margin Pressure, Waiting Better Entry Point (NYSE:DDL)

by Astrada Advisors
June 1, 2025
0

This text was written byObserveAstrada Advisors delivers actionable suggestions that improve portfolio efficiency and uncover alpha alternatives, supported by a...

Trump administration cancels .7B in clean energy projects, including at Exxon’s Baytown

Trump administration cancels $3.7B in clean energy projects, including at Exxon’s Baytown

by Carl Surran
June 1, 2025
0

Could 31, 2025 8:48 PM ETExxon Mobil Company (XOM) InventoryPBW, EMN, ERTH, QCLN, SMOG, PBD, ICLN, HDLMY, CNRG, ACESBy: Carl...

ASUS ExpertBook P1 Review: Practical power for everyday tasks?

ASUS ExpertBook P1 Review: Practical power for everyday tasks?

by zee business
June 1, 2025
0

ASUS ExpertBook P1 Evaluation: Final month, Asus launched its AI-powered laptop computer — the ExpertBook P1 — in India. Based...

Why India’s hotels enjoy highest EV per room globally

Why India’s hotels enjoy highest EV per room globally

by Euro Times
May 31, 2025
0

India’s resort sector is hogging the headlines with the nation witnessing its largest-ever hospitality IPO. Brookfield-backed Schloss Bangalore, proprietor of...

Next Post
Top Wall Street analysts say buy stocks like Texas Instruments

Top Wall Street analysts say buy stocks like Texas Instruments

The Ongoing Criminalization of Homelessness

The Ongoing Criminalization of Homelessness

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

DRDO to soon issue EOI for AMCA, HAL getting ready to bid through a consortium

DRDO to soon issue EOI for AMCA, HAL getting ready to bid through a consortium

June 1, 2025
Gibraltar Industries: Shares Have Fallen Enough To Justify An Upgrade (NASDAQ:ROCK)

Gibraltar Industries: Shares Have Fallen Enough To Justify An Upgrade (NASDAQ:ROCK)

June 1, 2025
Trump’s tax bill could weaponize U.S. capital markets, hit foreign direct investment

Trump’s tax bill could weaponize U.S. capital markets, hit foreign direct investment

June 1, 2025
Best Altcoins to Buy Before Bitcoin Becomes ‘Exponentially Harder to Buy’

Best Altcoins to Buy Before Bitcoin Becomes ‘Exponentially Harder to Buy’

June 1, 2025
A man opens fire on German police near the Czech border and is shot dead

A man opens fire on German police near the Czech border and is shot dead

June 1, 2025
Latam Insights: Bolivia Bans Crypto Energy Transactions, Panama Accelerates Bitcoin Adoption

Latam Insights: Bolivia Bans Crypto Energy Transactions, Panama Accelerates Bitcoin Adoption

June 1, 2025
Euro Times

Get the latest news and follow the coverage of Business & Financial News, Stock Market Updates, Analysis, and more from the trusted sources.

CATEGORIES

  • Business
  • Cryptocurrency
  • Finance
  • Health
  • Investing
  • Markets
  • Politics
  • Stock Market
  • Technology
  • Uncategorized
  • World

LATEST UPDATES

DRDO to soon issue EOI for AMCA, HAL getting ready to bid through a consortium

Gibraltar Industries: Shares Have Fallen Enough To Justify An Upgrade (NASDAQ:ROCK)

  • Disclaimer
  • Privacy Policy
  • DMCA
  • Cookie Privacy Policy
  • Terms and Conditions
  • Contact us

Copyright © 2022 - Euro Times.
Euro Times is not responsible for the content of external sites.

No Result
View All Result
  • Home
  • Finance
  • Business
  • World
  • Politics
  • Markets
  • Stock Market
  • Cryptocurrency
  • Investing
  • Health
  • Technology

Copyright © 2022 - Euro Times.
Euro Times is not responsible for the content of external sites.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In