For Investee Companies

IFMR Investments launches specialised funds under the ‘FImpact’ series suited to meet the funding and debt capital requirements of investee companies.

Our first fund – IFMR FImpact Investment Fund – specifically targeted the gaps in the long term funding and subordinated capital requirements of small and mid-sized high-quality microfinance institutions. The Fund provided long term debt capital to 8 microfinance institutions with a view towards enabling these institutions plan their long term strategies.

Our second fund – IFMR FImpact Long Term Multi Asset Class Fund – took on an expanded mandate of the previous fund and provides long term debt capital, both senior and subordinated, to retail financial institutions across microfinance, vehicle finance, small business loans and affordable housing finance institutions.

Subsequent funds that will be launched by IFMR Investments will be targeted towards plugging specifically identified funding and debt capital requirements of companies working in the financial inclusion space.

Asset Classes we specialise in:
Microfinance
Vehicle Finance
Small Business Finance
Affordable Housing Finance
Agricultural Finance

Investment Strategy:
IFMR Investments’ identifies and addresses gaps in the funding and debt capital structure of retail financial institutions in India. Each of the Funds launched by IFMR Investments is targeted to address a structural gap in the funding and debt capital structure of investee companies. IFMR Investments, consistent with the strategy adopted by its Parent, IFMR Capital, focuses on small and mid-sized high-quality institutions with strong governance and risk management processes and systems.

IFMR Investments comes with the IFMR Group’s in-depth understanding of the Indian retail finance space with the collective experience of due diligences on over 150 retail financial institutions across asset classes as highlighted above. These entities have outperformed the industry and displayed high degree of resilience due to their strong underwriting and origination processes; high focus on risk management; strong field operations and local presence. Backed by strong underwriting criteria and credit risk, IFMR Investments has laid down stringent filters on potential investee companies.

While IFMR Investments’ underwriting norms are specific to each asset class, the broad Framework hinges on the following pillars:

Due Diligence Approach:
IFMR Investments adopts a highly interactive approach and focussed in conducting Due Diligences (DD). The team spends considerable time preparing for the diligence which includes background work on the company, its group, its promoters, markets where it operates – geographical and otherwise, which are already available on the public domain. Legal and regulatory checks on the company and directors are also conducted in advance to the extent information is available.

The actual DD process consists of field visits, file and documentation review and meetings with the management and feedback. The entire process is structured around the following:

Post-Investment Monitoring:
The team will periodically assess portfolio entities under various scenarios – both external and internal to detect early warning signals that may have the potential to adversely affect the portfolio.

The portfolio is monitored through extensive field visits and desk based research covering both financial and operational performance. Our on-going monitoring efforts evaluate the entities on below principles on a regular basis to ensure continuous adherence to the covenants, post investment.

Our system of continuous post-investment monitoring has a pivotal role to play not only in our investment process, but also in guiding the investee entities towards industry best practices. Through our post-investment monitoring framework, which includes periodical field visits to investees spread across 3-4 days, the origination and risk management system of our investees is expected to evolve considerably. Improvement in internal audit processes in the investee institutions is expected to contribute to better asset quality. System/MIS have been upgraded leading to better reporting systems and ability to track granular details on each borrower.

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