Warburg Pincus inks control deal for Vistaar Finance; WestBridge, Saama exit

Private equity firm Warburg Pincus said Monday it has entered into definitive agreements to acquire a majority stake in Vistaar Finance, a non-banking finance company that lends to micro, small and medium enterprises (MSMEs) in India.

The deal provides an exit to existing investors WestBridge Capital, Elevar Equity, Omidyar Network India and Saama Capital.

Elevar and Saama were the first backers of the firm, followed by Omidyar. The company roped in WestBridge eight years ago when the private equity firm led the Series C round. A year later, the PE firm also led the Series D round of the lender.

Warburg didn’t disclose terms of the transaction. It also didn’t specify whether the transaction included a primary capital infusion into Vistaar.

Bengaluru-based Vistaar Finance, founded by Brahmanand Hegde and Ramakrishna Nishtala, started operations in April 2010. It provides secured loans to MSMEs across 12 states through 205 branches and over 2,100 employees.

The company targets small businesses such as shops, small manufacturing units, power looms, kirana /general shops, and home-based industries, which do not have access to organised funding for growth. It currently manages assets of over Rs 2,600 crore.

Narendra Ostawal, Managing Director, Warburg Pincus said, “We believe micro-enterprises in semi-urban and rural India are underserved by formal sources of credit and we believe Vistaar has the potential to fulfil that need gap and be a driver for broad-based growth on those regions and communities.”

Kotak Investment Banking was the exclusive financial advisor on this transaction.