Sachin Bansal sells microfinance business for Rs 1,479 Cr to Ananya Birla’s Svatantra

Svatantra Microfin, the venture founded by Ananya Birla, daughter of industrialist K M Birla, has acquired Chaitanya India Fin Credit, the microfinance business of Flipkart founder Sachin Bansal, for Rs 1,479 crore.

This move will sunset Navi Group's foray into the microfinance segment as Bansal now wants to focus only on digital-led businesses. His earlier application for a banking licence was rejected by the Reserve Bank of India.

In 2019, Bansal acquired Chaitanya, founded in 2009, for an enterprise value of Rs 150 crore and focused on providing credit to rural areas through the digital route.

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From margin to mainstream through microfinance

According to a statement, the book size of Chaitanya stood at Rs 4,900 crore at the end of FY23, registering an annual growth of 77%. It serves over 1.4 million customers across 12 states and has assets under management (AUM) of Rs 4,900 crore.

“This transaction is in line with our strategic plan to focus on our digital-first businesses, as we continue our digital-first financial services through the Navi Group. We believe that Svatantra Microfin is a good fit for Chaitanya, and the company will continue to grow and prosper with the combined expertise of both teams,” Navi Group Chairman Sachin Bansal said.

The transaction, expected to close by the end of this year, will elevate Svatantra as the second-largest microfinance institution in India, with more than 3.6 million active customers through 1,517 branches across 20 states and a combined AUM of Rs 12,409 crore, as on March 31, 2023.

On the acquisition, Svatantra Founder Ananya Birla said, “The proposed acquisition will propel Svatantra to a significant leadership position. The combined entity will command a substantial reach, enabling the delivery of a diverse array of financial services to our clients across a geographically diverse portfolio. We are committed to being a responsible lender.”

Svatantra was incorporated in 2012 by Birla and started its operations in March 2013. It serves over 2.2 million rural customers across 19 states with an AUM of Rs 7,499 crore (as on March 31, 2023).