Sachin Bansal Buys Majority Stakes in Chaitanya Rural Intermediation Development Services

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Team Industry Outlook | Thursday, 26 September 2019

Sachin Bansal, co-founder of Flipkart, has purchased a majority stake in Bengaluru-based microfinance company Chaitanya Rural Intermediation Development Services, a company that runs microfinance institution Chaitanya India Fin Credit (CIFCPL). He will become CRIDS new Chief Executive Officer. Bansal has bought a 94% stake, leading to the majority of investors in Chaitanya to exit through the deal.

The nonbanking finance company seeking fresh funding was in talks with Bansal for the last few months. He invested INR 739 crore, roughly $104 million, in CRIDS: INR 600 as a primary infusion and the rest in buying out existing shareholders. His exact stake in the company is undisclosed.

Founders Samit Shetty and Anand Rao will continue to be with the firm and spearhead their existing roles. Bansal sold his entire 5.5% stake in homegrown e-commerce company Flipkart to US retail giant Walmart in 2018. After his exit, he co-founded BACQ along with Bank of America top executive Ankit Agarwal. Bansal said he invested his own money for the acquisition. He has dabbled in start-ups after leaving Flipkart and has made debt investments in a variety of ventures like Vogo, Bounce, and Kissht and financing firms Altica Capital and Indostar Capital Finance. Bansal’s biggest bet is Ola, where he committed to invest $100 million in January. A source The equity investment is around $25 million, while the rest is structured debt. Ather Energy, the electric scooter start-up, is another substantial investment where he has put in close to $35 million. He has over a dozen angel investments from his time at Flipkart and beyond.

CRIDS, which started in 2009, focuses on low-income borrowers for vehicle finance, housing loans, small business loans, and education loans. It has 176 branches across 32 districts, and a total of 1,582 employees, according to the company’s latest annual report. In FY19, it disbursed loans around Rs 800 crore and had total assets under management of INR 567 crore. In the last fiscal, the company’s loan book grew by 61 percent, with an active customer base growth of 32 percent and a growth in average loan outstanding per client of 22%. Its net profit was INR 7.25 crore, up from Rs 4.66 crore the year before.