Piramal Alternatives buys 9.85% stake in Annapurna Finance for Rs 300 crore

14 May 2024 , 11:35 AM

Piramal Alternatives, the Piramal Group’s investment arm, paid ₹300 Crore for a 9.85% stake in Odisha-based micro lender Annapurna Finance via secondary share transactions.

The Piramal subsidiary also invested an equivalent amount in Annapurna by purchasing Tier-2 convertible bonds.

Piramal acquired the shares from existing investors, including Asian Development Bank, Bamboo Capital, Bio, DCB Bank, Oikocredit, Oman India Joint Investment Fund (OIJIF), Sidbi Ventures, and Women’s World Banking.

According to sources, Sidbi Ventures has pared the entire stake in Annapurna, while others have exited partially.

Piramal Alternatives now ranks among the top three institutional shareholders in the company. According to the individual, OIJIF has the largest stake at 11.58%, while Nuveen, which did not participate in the secondary auction, has roughly 11%.

“Microfinance as a retail asset class has grown at a 32% CAGR over the last decade and is expected to continue its high growth trajectory,” said Kalpesh Kikani, CEO of Piramal Alternatives.

“Through Piramal Alternatives, we are committed to providing bespoke and value-accretive capital to support Annapurna’s growth aspirations in this promising sector,” he stated.

Annapurna is one of India’s major non-banking finance company-microfinance institutions (NBFC-MFI) with assets under control of roughly ₹10,400 Crore as of March 31. The company, which has also ventured into MSME loans, operates in 20 states.

Gobinda Pattanaik, the managing director of Annapurna Finance, emphasized that the investment from Piramal Alternatives will empower them to diversify their business and reinforce their dominance in important markets.

He highlighted that the microfinance sector still has limited credit penetration, and with suitable funding and collaboration, they aim to craft a successful trajectory of growth and profitability.

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