IndoStar Capital Finance secures funding to fuel growth in core markets

IndoStar Capital Finance Limited (IndoStar), a distinguished player in the non-banking financial sector, has made a significant announcement that underscores its robust growth trajectory and strategic expansion plans. The company’s Board has approved a substantial fundraise of INR 456.6 crore through a preferential allotment of warrants, attracting investments from two major entities: Brookfield Asset Management via one of its private equity funds (referred to as “Brookfield”) and Florintree Tecserv LLP (“Florintree”). This financial infusion is aimed at propelling IndoStar’s growth in its key operational domains, including vehicle finance, affordable housing finance, and SME finance.

Brookfield and Florintree have committed to invest INR 256.6 crore and INR 200 crore, respectively, subscribing to approximately 13.95 million and 10.87 million warrants at a price of INR 184 per share. This arrangement stipulates that IndoStar will initially receive 25% of the warrant subscription amount, following customary regulatory and shareholder approvals. The balance 75% is slated to be received within the ensuing 18 months. Notably, this transaction will not alter Brookfield’s current shareholding percentage in IndoStar, maintaining the stability and continuity of the company’s ownership structure.

The infusion of funds is set to catalyze IndoStar’s expansion and consolidation in its principal markets, further solidifying its position in the competitive landscape of vehicle finance, affordable housing finance, and SME finance. This move is indicative of the strong confidence placed by both the promoters and the investors in IndoStar’s strategic direction and growth potential. Karthikeyan Srinivasan, CEO of IndoStar, expressed his enthusiasm about the capital raise, welcoming Florintree as a new investor and appreciating the ongoing support from its promoters, Brookfield and Everstone, along with all shareholders. This endorsement is pivotal for IndoStar as it continues to navigate its growth journey with an eye on broader market horizons.

IndoStar Capital Finance Limited operates as a non-banking finance company (NBFC), registered with the Reserve Bank of India as a systemically important non-deposit taking entity. With the backing of co-promoters Brookfield and Everstone, IndoStar has established itself as a professionally managed and institutionally owned organization, specializing in providing financing solutions for new and used commercial vehicles and affordable housing through its wholly-owned subsidiary, IndoStar Home Finance Private Limited.

The recent funding is a testament to IndoStar’s innovative strategies and its commitment to serving the evolving needs of its customer base. By leveraging these investments, IndoStar aims to enhance its service offerings, expand its market reach, and continue its trajectory of sustainable growth and value creation for all stakeholders.