SHIVALIK SMALL FINANCE BANK RAISES RS 111 CRORE FROM ACCEL, QUONA CAPITAL

Noida-based lender Shivalik Small Finance Bank on Wednesday announced that it has raised an equity round of Rs 111 crores led by venture capital firms Accel and Quona Capital.

AZB & Partners advised Shivalik Small Finance Bank Limited and its promoters:Mr. Sanjeev Kumar Mittal, Mr. Dinesh Kumar Mittal and Mr. Yashvir Kumar Gupta. The AZB & Partners team consisted of Partners, Niladri Maulik and Harsh Kabra, and Senior Associates, Sourya Donkada and Shantanu Tiwari.

Shivalik Small Finance Bank is the first small finance bank (SFB) in India that transitioned from an urban cooperative bank with 23 years of operations in offering retail banking products and services, it said in a statement. Shivalik has more than 5.6 lakh unique customers and operates through 46 branches and 21 exclusive business correspondent branches in northern India.

The bank intends to tap MSMEs and underserved retail customers in non-metros through partnerships. Swami said they are building a comprehensive library of API modules across customer onboarding, e-KYC, savings accounts, deposits, lending, payments and cards that can help bank’s partners to work with them to offer innovative banking solutions.

The fundraising by Shivalik comes amid the easing of the challenge related to securing credit faced by SFBs. According to a CareEdge Ratings’ Q2 FY23 report, raising capital had remained a key challenge for SFBs with the deferment of a number of initial public offerings (IPOs) in FY22 and Q1 FY23 largely because of an unfavourable equity market scenario and moderate performance of SFBs during FY22.

However, with a majority of SFBs already absorbing credit cost and growth coming back to the sector, capital mobilization has gained momentum. The report noted that SFBs raised equity and Tier II capital aggregating to Rs 3,275 crore during the second quarter ended September in the current fiscal as against nil in Q1 FY23. Many more SFBs also reviving their capital raising plans including IPOs. As of FY22, the total business of SFBs in India stood at Rs 2.79 lakh crore with deposits of Rs 1.44 lakh crore, it added.

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