Bengaluru, 23rd May 2011: Ujjivan Financial Services, a leading microfinance institution with pan-India presence has raised Rs. 173 million through a securitisation transaction. This is the third capital market transaction for Ujjivan and the first securitization transaction.
Samit Ghosh, Managing Director, Ujjivan said “This is yet another reaffirmation of our sound portfolio quality and the strength of our business operations”. In the past Ujjivan has raised debt capital through issuance of listed, secured, redeemable, non-convertible debentures and has now tapped the capital market again through rated securitization thereby diversifying its source of funding and establishing itself as one of the leading MFIs in the country.
The transaction was structured and arranged by IFMR Capital, a company based in Chennai that has worked to enable funding of more than Rs. 8 billion to high quality microfinance institutions.
Ms. Kshama Fernandes, the CRO of IFMR Capital said “We are pleased to start a relationship with Ujjivan, a high quality originator. The deal affirms IFMR Capital’s commitment to the microfinance sector. Creating marketability of these assets to a broader universe of investors has expanded access to capital for micro-finance institutions”.
The transaction is backed by 21,170 microloans originated by Ujjivan Financial Services. OMEGA PIONEER IFMR CAPITAL 2011, the Special Purpose Vehicle created for the transaction, has issued two tranches of securities rated by ICRA, India’s foremost rating agency: a 91% senior tranche rated LBBB+(so) that was subscribed to by a bank and a 9% subordinated junior tranche rated LBB(so) that was invested into by IFMR Capital.
Sudha Suresh, CFO, Ujjivan said, “This transaction signifies yet another diversification in Ujjivan’s sourcing avenues and marks our first business relationship with IFMR.”
Ujjivan Financial Services serves over a million clients and recorded a profit growth of 49% while its loan portfolio was up by 69% over last year, to INR 6250 Million. Its PBT stands at INR177.20 million with a post-tax profit of INR 114.10 million in the fiscal year 2010-11. Its repayment rate is a robust 98.91%.
Note to Editor:
The structure created by IFMR Capital ensures that the incentives of the originator, servicer and structure are aligned. While the originator and servicer, Ujjivan, provides cash collateral of 10% of the pool principal, the structurer, IFMR Capital, has invested in the subordinated junior tranche. The cash collateral and the subordination of payments to junior tranche in the waterfall mechanism ensure that the senior investor is protected against losses and any first loss is borne by the originator and the second loss by the structurer.
About the Company:
Ujjivan Financial Services, a microfinance institution (MFI), started operations in Bangalore in 2005 and is a partner of Grameen Bank, Bangladesh. It serves over 1 Million urban and semi-urban poor customers in 20 states across India through 351 branches and with over 4000 employees. In the last 6 years, Ujjivan has disbursed loans of over Rs.2000 Crores with a repayment rate around 99%. It won the Srijan MFI Transparency Award in 2010 and was ranked #1 in the microfinance industry in 2009 as the Best Place to Work. In a jointly funded program with staff, Ujjivan also provides emergency relief from natural & manmade disasters to customers and staff across the country. These activities are in addition to healthcare, education and vocational training programs provided to the customers in collaboration with Ujjivan’s sister organization, Parinaam Foundation. For more information, visit
For more information, contact:
Ankur Ganguly, Communications Manager, +91.81.98453.73818 /
Sudha Suresh, Chief Financial Officer, +91.96325.00431 / |
