Originally planned for Rs 75 crore, the equity round for Ujjivan was oversubscribed.

Looking at the amount of money MFI's (microfinance institutions) are raising even in the current downturn, it indeed appears that the economy of poor is decoupled from the financial crisis. Ujjivan Financial Services, the Bangalore-based microfinance institution focusing on the urban and semi-urban poor, has raised Rs 94 crore as its fourth round of funding. Originally planned for Rs 75 crore, the equity round was oversubscribed.

Unitus Equity Fund (UEF) managed by Elevar Equity, Bellwether Microfinance Fund, Michael & Susan Dell Foundation, A W Holdings and individual investors including promoter & CEO Samit Ghosh continued to remain invested. The five new investors in this private placement transaction are Sequoia Capital, Lok Capital, Unitus Equity Fund II, India Financial Inclusion Fund and SIDBI.

This will increase Ujjivan’s paid up capital and reserves to over Rs 108 crore, thereby making it the fourth highest capitalised microfinance institution in India. The capital will be used for the company’s major expansion plans for the next one year and to meet the enhanced capital adequacy norms set by the Reserve Bank of India. Grameen Capital India was the exclusive Equity Advisor for this transaction.

Speaking on this transaction, Samit Ghosh said, “Ujjivan has expanded the institutional investor base to create a balance between social and market driven private equity investors to ensure that its social mission is not diluted and at the same time it can maintain the ambitious growth plans. The support of these investors all through this transaction even under these challenging times is a testament to the future of microfinance industry in India.”