Financing The Aspirations of Indian Consumers

financing1Capital First Ltd (NSE: CAPF) is a leading Financial Institution in India focused on providing debt financing to MSMEs and Indian consumers. Capital First was founded in its current form in 2012 by Mr. V. Vaidyanathan by first acquiring a stake in an existing NBFC and then securing an equity backing of Rs. 8.10 Billion from global Private Equity player Warburg Pincus, transforming the business model and concluding a Management Buyout of company which included an open offer to the public, new shareholders, reconstitution of a new Board, raising Rs. 1.00 billion in fresh equity through preferential allotment, , and creation of a new brand and entity called Capital First.

The founding theme of Capital First is that financing India’s 50 million MSMEs and its emerging middle class, with a differentiated model, based on new technologies provides a large and unique opportunity.

Key Highlights
1. Founded in its current form in 2012 with backing from private equity.
2. Within 5 years, the loan assets of the Company had a multi-fold growth to reach Rs. 179.37 Billion.
3. Transformed from wholesale lender to retail lender with retail loans of Rs. 161.63 Billion, contributing more than 90% of the overall loan assets as of 30 September 2016.
4. Financed over 3.2 million customers within 5 years on back of new technology initiatives.
5. Capital First has built a large network and provides financing in222 locations across the length and breadth of the country.

As part of this theme, Capital First successfully created new models of financing entrepreneurs and Indian consumers in hitherto unbanked and under-penetrated segments and opened up new markets by using a differentiated model based on new technologies and deep analytics. With this differentiated approach, Capital First has financed over 3.2 million customers since inception and built loan assets of Rs.179.37 billion (as of Sep 30th, 2016).

Capital First provides debt financing to the mentioned target market segments ranging from as low as Rs. 10000 to Rs. 20 million for a wide range of tenures ranging from as low as 6 months to up to 15 years. Small businesses avail these loans usually for business expansion, purchase of Plant and Machinery, office furniture, painting and renovation of office, office lighting, display panels, office automation, PCs, laptops and printers. Consumers usually avail these loans for purchase of assets like televisions, LED Panels, washing machines, refrigerators, air-conditioners, mobile phones, two wheelers, and used cars.

Within a short time, Capital First has built a large network and provides financing in 222 locations across the length and breadth of the country. The loan book of the company is of high quality with Gross and Net NPA 0.98% and 0.45% respectively, which is quite low as compared to the rest of the industry. The company enjoys a high credit rating of AA+ which has been achieved by very select financial institutions in India. Capital First is focused on building an institution on strong pillars of ethics, values and high corporate governance.

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