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LeapFrog Investments and Aavishkaar Capital Invest $48 Million in Electronica Finance Limited

Global investment firm LeapFrog Investments and impact fund manager Aavishkaar Capital have jointly infused $48 million as equity capital in the Electronica Finance Limited (EFL). This investment is aimed at supporting the Pune-based finance company’s plans for funding MSMEs and rooftop solar projects in India.

The funds secured will not only strengthen EFL’s balance sheet but also provide the foundation for another phase of rapid expansion. These funds will be utilized to increase financing for MSMEs in the high-growth potential manufacturing segment in India, further contributing to the economic development of the region.

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Shilpa Pophale, managing director & CEO of Electronica Finance, highlighted that besides enhancing capital adequacy, the latest infusion would reduce leverage, with a long-term goal of maintaining leverage below three times. Pophale expressed confidence in the collaboration with two leading social impact investors, emphasizing their role in supporting small businesses to thrive and achieve resilient, low-carbon growth.

Utilizing the funds wisely, EFL has managed to grow its assets under management (AUM) by more than three times over the past five years, with the current AUM standing close to Rs 4,000 crore. The company projects a compound annual growth rate (CAGR) of around 35% over the next three years, showcasing its commitment to sustainable financial inclusion and growth.

EFL offers a diverse range of financial products, including machine loans, rooftop solar loans, working capital loans, and micro loans against property in semi-urban and rural India, aiming to provide sustainable financial inclusion to underserved communities.

Stewart Langdon, partner at LeapFrog Investments, emphasized the vital role of funding in promoting financial inclusion and climate resilience for small business owners who often struggle to access traditional banking services. Anurag Agrawal, partner at Aavishkaar Capital, reiterated their commitment to channel capital into growing and resilient businesses, acknowledging EFL’s significant opportunity to strengthen the MSME market.

Overall, the collaboration between LeapFrog Investments, Aavishkaar Capital, and Electronica Finance Limited signals a positive step towards driving economic growth, financial inclusion, and sustainability in India’s MSME sector.

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