Finova Capital
Overview
Finova Capital, established in 2015 by Mohit Sahney and Sunita Sahney, is a non-banking financial company (NBFC) headquartered in Jaipur, India. This company specializes in providing financial services to micro, small, and medium enterprises (MSMEs) across semi-urban and rural areas. With substantial backing from investors like Peak XV Partners, Faering Capital, and Norwest Venture Partners, Finova Capital has raised over $165 million in funding to expand its operations and enhance its technological infrastructure to support its lending services.
Recent Developments
- October 2024: Finova Capital has been actively seeking to raise INR 800 crore (approximately $95.3 million) in a combination of primary and secondary deals. New investors like Avataar Venture Partners and Madison India Capital, along with existing ones, are in discussions to participate in this funding round.
- September 2024: Finova Capital experienced a significant increase in asset growth, but also faced challenges with asset quality, as its gross non-performing asset (NPA) ratio rose to 1.79%. Despite this, the company reported a profit after tax of INR 151.5 crore for FY24, reflecting a 71% year-on-year increase.
- August 2024: Bain Capital Tech Opportunities completed the acquisition of Finova, aiming to merge it with other entities to consolidate its position in the mortgage and saving sectors. This strategic merger underscores Finova's growing influence and the changing landscape of financial services in India.
- May 2024: As part of its nationwide expansion strategy, Finova Capital has expanded its branch network to over 400 locations, covering 16 states, including new territories such as Karnataka and Himachal Pradesh.
- March 2024: The company received a reaffirmed CARE A; Stable rating for its long-term bank facilities, reflecting a strong capability in resources raising and a healthy credit profile, despite geographical concentration risks.
- January 2024: Finova Capital recorded impressive disbursement growth, reporting a 50% increase year-on-year in funds lent, indicating robust operational performance despite market fluctuations in borrower cash flows.
Company Information
| Attribute | Information |
|---|---|
| Founding Date | 2015 |
| Headquarters | Jaipur, Rajasthan, India |
| Founders | Mohit Sahney, Sunita Sahney |
| Revenue (FY24) | INR 529.3 crore |
| Profits (FY24) | INR 151.5 crore |
| Key Investors | Peak XV Partners, Norwest Venture Partners, Faering Capital, Maj Invest |
| Industry | Financial Services (NBFC) |
| Number of Employees | Approx. 1,243 |
Early History
Founded in 2015 by Mohit and Sunita Sahney, Finova Capital emerged from a vision to address the significant credit gap within India's MSME sector, particularly in underbanked regions. The founders leveraged their extensive experience in financial services to create a business model that emphasized flexible, customer-centered financial products. Initially serving Rajasthan and a few neighboring states, Finova rapidly expanded its footprint by customizing its offerings to the needs of rural entrepreneurs, which involved innovative credit assessment procedures based on cash flow analysis rather than conventional credit scores.
Company Profile and Achievements
Finova Capital operates as an NBFC with a clear mission to revolutionize credit delivery to unorganized and underserved segments in India. The company primarily offers loans tailored for microentrepreneurs and semi-skilled professionals. Finova's unique business model, which combines digital efficiency with grassroots-level service, has allowed it to serve over 20,000 customers across 400 branches in 16 states. Significant milestones include:
- 2019: Raised $15 million from Faering Capital and Sequoia India to enhance its geographic presence.
- 2020: Continued expansion into new Indian states, backed by $55 million from a series of funding rounds.
- 2022: Secured $65 million to augment its loan book and technological capabilities, reaffirming investor confidence amid challenging market conditions.
- 2023: Achieved an AUM of INR 2,818 crore, signifying steady growth and scaling of operations across its service regions.
Current Operations and Market Position
Finova Capital stands as a prominent player within India's NBFC space, focusing on MSMEs that are traditionally underserved by large financial institutions. Its operations extend to small ticket loans designed for entrepreneurs in rural areas, using a hybrid "phygital" (physical and digital) approach that maximizes reach and minimizes operational costs. This has positioned Finova as a leader in driving financial inclusion. Leveraging advanced data analytics and a strong understanding of local economies, the company maintains a competitive edge with high customer acquisition rates and efficient loan processes.
Conclusion
Finova Capital has established itself as a trailblazer in the financial services sector for MSMEs, addressing a critical gap in India's underbanked market. Its innovative approach, backed by strong financial metrics and substantial investor support, forecasts a promising trajectory. As Finova continues to expand geographically and technologically, it is poised to play a key role in fostering entrepreneurial growth and economic development across India's semi-urban and rural landscapes.