Magma Leasing to raise $15 mn from the Netherlands-based financial institution FMO

Magma Leasing Limited will make a private placement of $15 mn or around Rs. 65 crores of redeemable preference shares to The Netherlands Development Finance Company (Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden – FMO). This follows an earlier investment of Rs. 21 crores by FMO in Magma preference shares in February 2006. The investment will be treated as Tier-2 capital in the company, as per RBI guidelines. The funds raised would be used strengthen the balance-sheet and drive business volume growth.

Magma had received an investment of Rs. 105 crores in August 2006 from the UK-based Cambridge Place Investment Management and following its merger with Kolkata-based Shrachi Infrastructure Finance Limited, Magma now had a branch network at 154 locations and over Rs. 5500 crores worth of assets under management.

Magma finances commercial vehicles, cars, construction equipment, and multi-utility vehicles, and users in semi-urban and rural markets contribute a significant proportion of its business. It also has fee-based businesses like distribution of insurance and personal loan products.

Read the article in Business Standard.
Related Post:
Local microfinance fund Bellwether gets $2.4 mn from Dutch firm

Local microfinance fund Bellwether gets $2.4 mn from Dutch firm

Bellwether Microfinance Fund has received an investment of $2.4 mn from Dutch financial company Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden NV (FMO). FMO has an 18.6% holding of the total paid-up equity in the BW with this investment. FMO is the third foreign institutional investor to invest in Bellwether.

Hyderabad-based Bellwether is India’s first microfinance venture capital fund. It was invested in 2005 and has invested till date Rs. 19 crores. So far, it has made 10 investments aggregating Rs. 27.5 crores in a wide variety of MFIs. Over 80% of its funds committed till now have been in the traditional microfinance markets of the four southern states. It is managed by its fund management company, Caspian Advisors Private Limited. Caspian is composed of a team of microfinance experts.

As of now, the Hivos-Triodos Fund of the Netherlands and the Gray Ghost Microfinance Fund of USA are the major investors in Bellwether. The two investors have also subscribed to additional shares amounting to $1.2 mn each.

Read the article in Business Standard.