Private Equity Firm Seeks Strategic Buyer for NBFC Stake Sale
Private equity (PE) firm True North is preparing to sell its majority stake in Infinity Fincorp Solutions, a Mumbai-based non-banking financial company (NBFC) specializing in small-ticket loans against property. The firm is expected to appoint investment bank Avendus Capital as its advisor, with the deal likely to be launched next month.
According to sources, the expected enterprise value for Infinity Fincorp is estimated between $325 million and $375 million, as True North looks for a potential buyer.
Infinity Fincorp: A Niche Player in the Micro-LAP Lending Space
Infinity Fincorp operates in a high-yield, fully secured lending market with a focus on micro-loans against property (micro-LAP). This segment has limited competition, with several players either considering listing or exploring merger and acquisition (M&A) options.
“The micro-LAP segment is a niche space with few competitors, and most are currently preparing for public listings. Infinity Fincorp, with its single-line business model and yields above 20%, is expected to attract private equity players and strategic buyers,” said a source familiar with the transaction.
Strong Growth and Financial Performance Bolster Valuation
Infinity Fincorp has witnessed robust growth over the past year, significantly improving its financial position and market attractiveness.
Assets Under Management (AUM): Surpassed ₹1,000 crore in November 2024, marking a 33% increase since March 2024.
Projected AUM: Expected to reach ₹1,300 crore by March 2025 following recent capital infusion.
Profitability: Reported a profit of ₹26 crore in FY24, with a forecasted increase to ₹47 crore for FY25.
Following its fundraising round in January 2025, where it raised $35 million led by Jungle Ventures, along with Archerman Capital and Magnifico, the company has continued its expansion efforts.
“We are on track to scale our AUM to ₹1,300 crore by March 2025, driven by strong demand for small business loans,” said Shrikant Ravalkar, Founder, MD & CEO of Infinity Fincorp, during the latest funding announcement.
Rising Private Equity Interest in India’s NBFC Sector
The Indian NBFC sector has garnered strong investor interest over the past 12-18 months, with major global PE firms actively pursuing deals in the space.
Recent transactions and investment activity in the sector include:
CVC Capital Partners, EQT, Bain Capital, Ontario Teachers’ Pension Plan, Warburg Pincus, and Mubadala have all invested in or explored NBFC transactions in India.
Actis-owned Profectus Capital, an MSME-focused NBFC, is also in discussions to dilute its stake and onboard a partner.
The ongoing consolidation and investor appetite in the NBFC segment make Infinity Fincorp an attractive asset, especially as it operates in a high-margin, secured lending business with strong growth potential.
True North’s Long-Term Investment in Infinity Fincorp
True North, which initially invested in Infinity Fincorp in 2016, has supported the company through strategic growth phases, including a business model pivot post-2019 to focus on micro and small enterprise lending in tier-3 and tier-4 cities.
The NBFC has funded over 30,000 customers and operates in more than 130 locations across India.
It competes with players like Five Star Business Finance and IPO-bound Veritas Finance, which are backed by Norwest Venture, Multiples PE, and Kedaara Capital.
True North’s Broader Financial Services Portfolio
Apart from Infinity Fincorp, True North holds investments in several key financial services firms, including:
Home First Finance
Niva Bupa (formerly Max Bupa Health Insurance)
Fedbank Financial Services (FedFina)
AU Small Finance Bank
The exit from Infinity Fincorp aligns with True North’s broader strategy of unlocking value from mature investments and reallocating capital toward new high-growth opportunities.
Potential Buyers
With Infinity Fincorp’s profitability, strong growth trajectory, and secured loan portfolio, the sale is likely to attract interest from both domestic and international investors.
Global private equity firms with NBFC exposure could be keen participants.
Indian financial services conglomerates seeking expansion in the high-yield secured lending segment may also explore acquisition opportunities.
The NBFC sector’s ongoing M&A activity suggests a positive market environment for deal-making.
While True North and Infinity Fincorp declined to comment on the stake sale, investment bank Avendus Capital is expected to lead the transaction, with further developments anticipated in the coming months.
