Supply chain-focused non-banking finance company (NBFC) Livfin India plans to raise about ₹200 crore in equity funding in two years, of which the first tranche of ₹40 crore will be raised by June.
The Gurugram-based firm, a part of the SAR Group, is in talks with a clutch of Government-owned financial institutions in Europe to raise the first tranche. The firm intends to offload about 15 per cent stake in lieu of ₹40 crore it intends to raise.
“We have about ₹40 crore of equity and when you go to banks they give us the leverage of around 3.5-4 times on the amount of equity that we have. So, based on the equity that we have, we've already raised about ₹120 crore, but we need to grow and for that, we need to add more equity to fund business for the current financial year,” Livfin Managing Director and Chief Executive Officer Rahul Chander said.
“We will use the equity to raise debt from banks and together all of that will be deployed to provide loans and continue the business,” he added.
Chander, however, declined to name the financial institutions the company was in talks with.
With the first tranche of ₹40 crore coming in, the company will have about ₹80 crore of equity by June (including the earlier funding), enabling it to leverage it four times and raise about ₹320 crore of debt.
Net AUM
Livfin, which had a net Assets Under Management (AUM) of ₹101.50 crore as of March 31, is targeting to close this fiscal with a ₹400-crore AUM. In FY19, Livfin raised ₹100-crore debt.
Livfin, which only does supply chain finance, disburses loans in the range of about ₹20 lakh-2.5 crore.
The company, which was co-funded by the promoters of SAR Group, will raise the second tranche of ₹150-160 crore later from a private equity fund, he added.