Singapore-based Affirma Capital, the emerging markets private equity firm spun off from Standard Chartered PE, led a 350 crore rupee (approx. $ 47 million) round of investment in Belstar Microfinance Ltd, a subsidiary of Muthoot Finance Ltd.

The private equity firm joins existing investors Muthoot Finance and Maj Invest to invest Rs.300 crore (approximately $ 40 million) of the total funding to take an 18.45% stake in the microlender.

Affirma Capital Managing Director Vijay Nallan Chakravarthi will join Belstar’s board of directors as part of the deal.

This is the second PE investment in Belstar, Maj Investing in 2018.

Maj Invest, which held an 11.05% stake, also injects Rs 22 crore while Muthoot Finance finances Rs 28 crore.

Maj Invest, a Denmark-based asset management company with around $ 17 billion in assets under management (AUM), had previously invested in Chennai-based Belstar in late 2018.

After the capital injection, its stake will be reduced to 10.02%.

In 2016, as part of its diversification, Muthoot Finance made an initial investment of Rs 40 crore in Belstar Investment and Finance Pvt Ltd and also acquired the participation of foreign investors to hold 64.60%, making it a subsidiary company.

Over the years, it has increased its stake in Belstar to over 70%. With this transaction, Muthoot Finance’s stake will increase to 57.89%.

The deal also includes a secondary offer to sell shares by the promoters of Belstar and Muthoot Finance for Rs20 crore.

The promoter’s stake in the company will decrease from 18.94% to 13.63%.

“This funding will help Belstar grow its loan portfolio and achieve its vision of becoming a socially responsible microfinance institution working for entrepreneurship and women’s economic empowerment,” said George Alexander Muthoot, Managing Director of Muthoot Finance.

Belstar MD Kalpanaa Sankar, who has run the company since its inception, said the new investment during the Covid-19 pandemic “validates the great microfinance market opportunity” and Belstar’s potential to capitalize on the opportunities.

InteQuant Advisors was the sole financial advisor on the transaction, which is subject to regulatory approvals, including from the Reserve Bank of India.

The cash transaction is expected to be finalized within three months.

Asserted Capital

Affirma Capital manages more than $ 3.6 billion in assets for global sponsors and sovereign wealth funds. It is owned and operated by the former senior executive of Standard Chartered PE.

In its previous avatar as Standard Chartered Private Equity, the fund started investing in India in 2004, according to VCCedge.

She has invested in several mid to late stage companies across a wide range of industries including pharmaceuticals, infrastructure and banking.

Their previous investments in India include Northern Arc Capital, Mahindra and Mahindra Financial Services, Prodapt Solutions, Travel Boutique Online, Craftsman Automation, Tirupati Medicare and GMR Airports.


Belstar Investment and Finance Pvt. Ltd (BIFPL) was incorporated in January 1988 in Bangalore and was registered as a non-bank finance company in 2001.

It was acquired by the Hand in Hand India group (HIH India) in September 2008.

In 2010, Belstar received an equity investment from NMI Frontier Fund, a Norwegian fund investing in emerging economies, as well as other investors including the International Finance Corporation (IFC), the Swedish Development Finance Institution and Aavishkaar Goodwell.

Currently, Belstar operates through a network of 650 branches in 19 states and manages assets of over Rs 3,100 crore.