Chaitanya Ind Fin has its own Svantantrata

Sachin Bansal’s NBFC MFI (Microfinance) company called Chaitanya is now Svatantra (independent) from Sachin Bansal himself.

What is the transaction about ?

Ananya Birla’s company called “Svatantra Microfin” is set to acquire Sachin Bansal backed Chaitanya India Fin for 1,479 crores and therefore after the regulatory approvals, Chaitanya India Fin will then be Svatantra (not controlled) from Navi group . The transaction is expected to be completed by 2023.

Who are the parties to the transactions involved ?

Svatantra Microfin , founded by Ananya Birla is the acquirer and Chaitanya India Fin , founded by Sachin Bansal is the target of this transaction

What is the core business model of Svatantra Microfin ?

Svatantra specializes in providing microcredit at accessible rates to rural women. With a presence spanning 19 states, it has successfully catered to more than 2.2 million rural customers. Notably, its compounded growth rate for the FY15-23 period stands at an impressive 118 percent.

What is the core business model of Chaitanya India Fin ?

The focal point of Chaitanya’s operations lies in digitally serving rural India, reinforced by the backing of its parent company, Navi, to extend credit accessibility across the rural landscape. The company has achieved an impressive compounded annual growth rate of 77 percent, witnessing a substantial expansion of its portfolio from around Rs 900 crore in March 2020 to exceeding Rs 4,900 crore by March 31, 2023. Chaitanya services 1.4 million customers across 12 states in India.

What shall the transaction result into for Svatantra Microfin ?

The suggested acquisition is poised to transform Svatantra into India’s 2nd largest Micro Finance entity. This transformation would encompass a vast outreach of over 3.6 million active customers across 1,517 branches in 20 states. Additionally, there would be a combined asset under management (AUM) of Rs 12,409 crore as of March 31, 2023.

Why did Sachin Bansal made this move to exit Chaitanya India Fin ?

In May 2022, Sachin Bansal’s attempt to transform Chaitanya Fin Credit into a universal lender by applying for a bank license faced a setback as the Reserve Bank of India rejected the application. This decision could potentially be attributed to the promoter’s limited background in the banking sector, which might have factored into the rejection.

What are the views of the Microfinance Industry experts about this acquisition and synergy gains?

An expert of the microfinance has said that Svatantra has undertaken this acquisition as it will help them gain a strategic outreach in South India and synergy gains will be added accordingly. Svatantra has always been known for its efficient operations and responsible lending and a bigger AUM will further strengthen it leading to economies of scale. And that’s how Chaitanya India Fin is now Svatantra from its owner – Sachin Bansal.