Homegrown private equity firm Multiples has acquired a significant non-controlling stake in former Deutsche Bank Asia-Pacific CEO Gunit Chadha-promoted APAC Financial Services, a non-banking financial company that aims to cater to the micro, small and medium enterprises (MSME) and housing finance segment. Multiples has infused close to Rs 250 crore in APAC, according to sources. Nithya Easwaran, managing director at Multiples Equity, will be joining the board of APAC.
APAC group started operations in Mumbai in July 2018 after obtaining an NBFC licence from the Reserve Bank of India (RBI) and a housing finance company licence from National Housing Bank. After this investment from Multiples, the share capital of the group stands at around Rs 400 crore.
Chadha, along with the leadership team, started the firm with an initial capital of Rs 125 crore. The company operates under the brand ‘Aapka Loans’ for the affordable housing finance business.
Sources told FE that although APAC commenced operations in mid-2018, talks with Multiples have been going on since a significant period of time. The private equity firm has had prior experience of investing in a start-up NBFC. In 2016, it had invested in Vastu which is a housing finance platform.
Renuka Ramnath, founder and managing director, Multiples Alternate Asset Management, stated in a release issued by APAC that the PE firm has been following APAC’s progress over the last one year and has been impressed with the leadership team’s alignment with the long-term goals of the company by their significant equity investment.
“We like the financial services sector where APAC is looking to build a granular asset portfolio by providing funding to underbanked and underserved micro, small and medium enterprises. With appropriate risk controls and significant digitisation and innovation, this looks like a scalable business model,” she said.
Chadha, founder and CEO, APAC Financial Services, said the firm is delighted to get the private equity firm on board as a valuable long-term partner as they share similar values. “We wanted to have an institutional partner who provides both financial and intellectual capital to realise our vision. Both Renuka and Nithya have an admirable track-record in financial services and APAC would look to capitalise on their experiences,” he said.
APAC, which is based out of Mumbai, currently has over 40 employees and is looking to make smaller ticket size loans and create a granular portfolio. In order to cater to the affordable housing segment, the firm has opened branches in Virar and Kalyan and is looking at expanding into other cities and states.
Multiples is an India-focussed private equity firm founded in 2009 by Renuka Ramnath. Currently, it manages approximately $1.1 billion of private equity raised from Indian and global institutions.