Billionaire Sachin Bansal's return to an executive role, about a year after he left e-commerce giant Flipkart that he had co-founded, is expected to attract more investments in the rural financial services segment.
Bansal, who left Flipkart after US retail giant Walmart's $16-billion takeover, picks up a majority stake in the Chaitanya Rural Intermediation Development Sevices (CRIDS), which runs Chaitanya India Fin Credit (CIFC), with his Rs 703 crore investment, media reports say.
About Rs 600 crore of his investment will be for primary capital infusion in CRIDS, co-founded by Anand Rao and Samit Shetty.
"Sachin brings with him the ability to build huge scale grounds up to CRIDS," a Business Standard reported quoted Shetty as saying.
Bansal will take over as CEO of CRIDS but has said that Rao and Shetty would continue to be with the firm and spearhead their existing roles. "This acquisition is our entry into financial services," Bansal said in a statement.
Bansal's bet on CRIDS comes in the backdrop of the rise of specialized lenders and mobile payment companies, the report says. According to Boston Consulting Group, more than 1,000 fin-tech companies have come up in India in the last few years.
Started in 2009, CRIDS mainly serves low-income borrowers of finance in the vehicle, housing, small business, and education segments. The company has 176 branches in 32 districts and has 1,582 employees, its latest annual report shows. The company operates mainly in the states of Karnataka, Bihar, Maharashtra, Jharkhand and Uttar Pradesh.
The lender disbursed loans of around Rs 800 crore in the last financial year and had total assets of Rs 567 crore under its management. The company's loan book grew by 61 percent last fiscal, with active customer growth of 32 percent and growth in the average loan outstanding per client of 22 percent. The company's books showed a net profit of Rs 7.25 crore, up from Rs 4.66 crore the year before.
Bansal reportedly made $1 billion from the Walmart deal in December 2018 which was the biggest takeover of an e-commerce company in India.
After leaving Flipkart, Bansal has been financially involved in some other startups like app-based vehicle-lending companies Vogo and Bounce, electric scooter maker Ather Energy, and financing firms Altica Capital and Indostar Capital Finance.
Some of these investments have been made through BACQ, a venture he started last year with his former IIT-Delhi batch mate Ankit Agarwal. However, reports say, Bansal's biggest bet so far is app-based cab-hailing firm Ola, with which he has committed $100 million investment, including about $25 million in equity.