Independent Research and Policy Advocacy

IFMR Capital structures Rs. 108 Mn securitisation transaction

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IFMR Capital recently structured and arranged a Rs. 108 million securitisation transaction – backed by 11,304 microloans originated by one of the leading MFIs in the country, Grama Vidiyal based out of Trichy. Beta IFMR CAPITAL 2011, the Special Purpose Vehicle created for the transaction, issued two tranches of securities rated by ICRA: 84% senior tranche rated A1(SO) that was subscribed to by private wealth investors and 16% subordinated junior tranche rated A3(SO) that was subscribed to by private wealth investors and IFMR Capital.

“This deal represents the largest debt investment by private wealth investors into the microfinance sector. We are happy to see the investor base expand, helping us infuse liquidity to high quality MFIs at this crucial juncture,” said Meenal Madhukar, Head – Investor Relations at IFMR Capital

Nikhil Kapadia, CEO-Wealth Management, Avendus Capital, said “We were the first wealth management firm in India to identify the opportunity in subscribing to these securitised papers, now our investor base has increased its allocations to such customized instruments and has allowed us to syndicate a full issue. Our wealth platform is based on the concept of Solutions which are structured for each client need and hence we constantly seek innovative products for each risk level”.

The structure created by IFMR Capital ensures that the incentives of the originator, servicer and structurer are aligned. This has enabled a variety of investors – banks, NBFCs, mutual funds and now private wealth investors – to provide much-needed liquidity to the sector via investment in IFMR Capital-structured transactions

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  1. This is a wonderful transaction that links the poorest individuals in the country with the richest and opens up new possiblities for both of them.  I would like to compliment IFMR Capital for its successful efforts to diversify investor bases as well as bring the best of risk management and process capability to bear on this very important asset class.

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