Apac Financial looks to raise Rs 500 crore

Mumbai: Apac Financial Services, the non-banking finance company (NBFC) promoted by the former Deutche Bank India CEO Gunit Chada, is looking to grow through equity than debt as the firm prepares for the next round of fund raising.

Apac is looking to raise Rs 500 crore in the next nine to 12 months, though the firm is yet to start official discussion on this, Chadha told ET. “Our business has demonstrated high credit quality since 18 months of operations and we will be looking at very prudent leverage of under 3:1 going forward.”

The first round of funding for Apac came from private equity firm Multiples that invested Rs 245 crore for a “significant minority” stake in the company. Besides, former HDFC deputy managing director Paresh Sukhtankar has also invested in the company.

Chadha, who once led the operations of marquee foreign banks like Citi and Deutche Bank, is now looking to capture the “granular end of small and medium enterprises in urban and rural India. From lending money to a dairy farmer in Rajahmundry to buy buffaloes to helping a kirana store owner in Gujarat to stock pile their provisions, Chadha said his NBFC wants to serve customers under banked or under served by large banks. He also wants to ensure that in the process of building his loan book, the organisation ensures highest level of governance and risk management.

A late entrant to the business, Apac came into business at a time when NBFCs are facing regulatory turbulence that swelled the non-performing assets of several banks. This also led to reluctance of bigger rivals who are shutting doors on small borrowers due to the liquidity issues. But in a little over a year, Apac has piled up an asset base of Rs 264 crore with average tenor of 60 months.

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