Global Private Equity firm Warburg Pincus’ affiliate has picked a minority stake in the Delhi-based microfinance entity Fusion Microfinance. This is the private equity firm’s first ever investment in the Indian microfinance industry.

It has led a ₹520 crore equity round of Fusion Microfinance.

This fund raise by Fusion Microfinance is one of the biggest in the NBFC-MFI sector in the country.

Fusion Microfinance on Tuesday announced that it has closed its Series E investment round of ₹520 crores led by an affiliate of Warburg Pincus LLC. The investment round includes both a primary fund raise and secondary sale by early-stage investors.

Creation Investment, an existing investor, has also participated in this round. Early investors Incofin, NMI, BIO and SIDBI made successful exit.

Devesh Sachdev, CEO and Founder of Fusion Microfinance, said, “We are very excited about our partnership with Warburg Pincus. This investment would support our endeavour to develop into one of India’s most preferred companies in the financial inclusion space.”

Narendra Ostawal, Managing Director, Warburg Pincus said, “Fusion has had a remarkable journey to become a leading microfinance company in a relatively short period of time. Warburg Pincus looks forward to backing Devesh and the management team in its next phase of growth.”

Fusion Microfinance, established in 2010, is the youngest company amongst top 10 pure play microfinance companies in India. It has cumulatively disbursed loans worth over ₹5,000 crore.

The company is a rural MFI with a pan-India presence through 500 branches across about 200 under-developed districts in 18 states of India. It has an outstanding portfolio of ₹2,050 crore, as on September 30, 2018, serving more than 1.3 million customers.

Fusion also intends to selectively evaluate potential acquisition opportunities and lead the potential consolidation in the sector.

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