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Exclusive: Finnova Capital raises INR 10 crore Debt from Punjab National Bank

Rajasthan based NBFC Finnova Capital has raised INR 10 crore debt from Punjab National Bank (PNB). This is second time that the Jaipur headquartered firm has raised fresh fund via debt route in less than a month. Techpluto had exclusively reported that Finnova Capital had raised INR 15 crore debt in the last week of August from Bank of Baroda.

For securing latest tranche of funding worth INR 10 crore, Finnova Capital has issued 100 non-convertible debentures at a face value of Rs 10, 00,000 each to PNB, according to regulatory filings. The NCD issued to PNB expiries after the period of 2 years and 7 months.

Notably, Finnova Capital had raised $15 Mn in series B equity funding round in March last year from Faering Capital and existing investor Sequoia Capital. It had received $6 Mn in series A round from Sequoia Capital in 2018. The company hasn’t so far raised any equity funding this year.

It must be noted that NBFC regularly raises debt mostly from nationalized bank to meet their credit targets and in order to increase their loan book. However, owing to on-going liquidity crisis in India’s financial sector many NBFCs are facing hurdles in raising funds from bank. The liquidity crisis started after IL&FS went bankrupt last year and exacerbated further in the aftermath of Covid-19.

Finnova had earned profit of approximately 14 crore or 140Mn in FY20, as per the regulatory filings. This is a jump of nearly 0.5X as compared to FY19 when it had earned Rs 9 crore revenue.

Finnova’s average loan size ranges from Rs 5 lakh to Rs 6 lakh for the period of five to seven years. Founded in 2015 by Mohit Sahney, Finnova’s customers mostly constitutes of MSME and small time entrepreneurs who often find it tough to source credit from banks and other financial institutions.

Last year, Finnova said that it will be pursuing aggressive geographical expansion. As per  media reports, the company said that it aims to increase its number of branches from 52 to 75 in FY20 and will focus mainly on Madhya Pradesh and Delhi for expanding its market further.


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