TVS, other investors keen to buy into Jana Small Finance Bank

Synopsis

Jana Small Finance Bank is poised for a significant capital infusion. The TVS Venu Group plans to acquire a 10% stake. Several other investors are also lining up to invest. This marks Jana's first equity raise since going public. The bank's capital adequacy ratio remains strong. TPG Capital may partially reduce its holding.

Kolkata: A clutch of new investors, including Venu Srinivasan-led TVS Venu Group, would buy into Jana Small Finance Bank, while the lender's long-time partner TPG Capital is likely to partially reduce its stake, people aware said.

The total fundraise for the universal bank aspirant is likely to be up to ₹700 crore. The infusion would involve a combination of primary and secondary deals, said the people cited above. The TVS Venu Group is looking to acquire a 10% stake in the bank for about ₹450 crore.

According to industry sources, three to four other investors are lined up for making investments in the bank, which is the fourth largest small finance bank in terms of gross loan portfolio. An overseas corporation has shown interest too. Jana is likely to announce the equity deals on Monday.

"The development assumes significance for Jana's journey as corporate and large family offices showing interest in the bank. This is going to be longer term capital while private equity firms typically look to exit after a certain period," a person familiar with the development said.

This is going to be Jana's first equity raise since it went public in February 2024. Jana had its capital adequacy ratio at 19.4%, against the minimum regulatory norm of 15%. Sources said that TPG Capital, which now holds 8.11% in Jana, may be looking to pare up to 5% stake. TPG holds the equity through its fund called TPG Asia VI SF. The group first invested in Jana way back in 2014, when it was a microfinance company called Janalakshmi Financial Services.

Live Events

The bank did not comment on the matter. TVS Venu Group's interest in Jana Bank would mark its first investment in the banking sector. The investment would require approval from The Reserve Bank of India, which would examine the fit and proper criteria of the investor. No approval is required from the central bank for investment in banks up to 4.99%. The TVS Group did not respond to ET's query on the development. Jana Bank has a diluted ownership structure with promoter holding standing at 21.85%. Besides TPG, two more foreign entities are owners in the bank-Harbourvest Partners Co-investment Fund held 2.38% and North haven PE Asia Platinum held 3.18% at the end of March.