Goldman, Credit Suisse keen to bank on micro lender Janalakshmi, eye Rs 1200 cr investment
    Goldman, Credit Suisse keen to bank on micro lender Janalakshmi, eye Rs 1200 cr investment - Economic Times
    Sources said Janalakshmi is facing financial stress and may have to write off loans worth Rs 1500-2000 cr before transforming into a small finance bank.

    KOLKATA/MUMBAI: Stung by demonetisation and non-repayment of loans, India’s largest microfinance company Janalakshmi Financial Services (JFS), which has received the final small finance bank licence as late as April, is in talks with marque investors Goldman Sachs and Credit Suisse to raise fresh equity of about Rs 1000-Rs 1200 crore, said multiple sources aware of the matter.Existing investors led by TPG , GIC of Singapore, Morgan Stanley Private Equity Asia are also expected to further capitalise the company with fund infusion of another Rs 600-700 crore, a year after the Bengaluru-based company raised its biggest funding round of $210 million from financial institutions at a Rs 4800-crore valuation.Industry sources said Janalakshmi is facing financial stress and may have to write off loans worth Rs 1500-2000 crore before transforming into a small finance bank.We will let you know on further developments,” the company’s spokesperson told ET in response to its detailed questionnaire.Janalakshmi grew very fast since 2015 and industry watchers say high growth often leads to larger stress, especially in difficult times.Its loan portfolio jumped from a mere Rs 3734 crore at the end of March 2015 to Rs 10,983 crore at the end of March 2016 and Rs 12,416 crore at end of 2016.Reliable sources in the industry said that Janalakshmi's portfolio at risk (PAR) for 30 days was 30% on a GLP of Rs 12,551 crore at the end of March 2017, compared to the industry average of 14.1%.The asset quality of most microfinance organisations has taken a hit post demonetisation, but the extent of the decline has surprised most analysts.India Ratings & Research said that in case collections (on portfolio as on December 31, 2016) do not increase from the current level, MFIs with significant exposure to affected states and with aggregate loans under management of Rs 1000 crore and above could incur credit costs and capital erosion.Rating company ICRA had in March cut the long term rating outlook of Janalakshmi to negative from stable, as the company's repayment collection suffered after demonetisation.Set up by a former Citi banker Ramesh Ramanathan, Janalakshmi takes banking to the unbanked, offering micro loans to women, loans to small and marginal farmers, loans to urban poor individuals for home improvement and education, among others.The MFI offers individual loans up to Rs 2 lakh, enterprise loans up to Rs 6 lakh and MSME/long term business loans up to Rs 50 lakh.The lender had 519 branches in 20 states and 58.9 lakh customers as of March 31, 2017.

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