Microfinance Focus, August 3, 2011: Following their recent Rs 100 crores equity and debt capital raise, Delhi based microfinance institution Satin Creditcare Network Limited recently received credit rating upgrades from CARE Ratings.

CARE Ratings has reviewed Satin’s operational and financial performance for financial year 2010-11 and has upgraded the MFI grading to MFI 2 and maintained the rating for non-convertible debentures (NCDs) at CARE BBB-.

The ratings upgrade follows the successful completion of Satin’s third round equity infusion of Rs 40 crore (~USD 9 million) from ShoreCap II Limited and Danish Microfinance Partners K/S (DMP) in two tranches in December 2010 and February 2011.

In addition, in March 2011, Satin raised Rs 12 crore (~USD 2.7 million) of debt through issuance of secured, redeemable NCDs to DWM (Cyprus) Limited, a member of the Developing World Markets (DWM) group of companies.

Satin which is a non-banking finance company also participated in securitization transactions from March 2011 to June 2011, with the amount of securitized portfolio aggregating Rs. 48 crore. The ultimate buyers in the securitization transaction for the senior tranche were Reliance Capital, Ratnakar Bank and Axis Bank.

Unitus Capital was Satin’s sole financial advisor for the equity raise and NCDs and continues to work closely with Satin. IFMR Capital acted as the financial advisor for the securitization transactions.

As on June 30, 2011, Satin had Rs. 212 crores (USD 47 million) of portfolio outstanding across 8 states of India and was lending to over 235,000 active borrowers. Satin’s repayment rates remain near the 99% mark and have not been affected by the crisis.

Commenting on the transactions and subsequent ratings upgrade, Mr. H P Singh, Chairman cum Managing Director, Satin said, “We are very pleased to partner with ShoreCap, DMP, DWM (Cyprus) Limited, Reliance Capital, Ratnakar Bank and Axis Bank and appreciate the support and commitment shown by them during these turbulent times. We have faced no repayment problems with our borrowers and are confident that we will be able to expand and serve more rural and urban borrowers throughout Northern India.”

“Unitus Capital takes pride in having helped structure and facilitates the equity and NCD transactions for Satin, which has shown great leadership during the recent uncertain times. These transactions indicate that Satin has played a leading role in turning the tide for the India microfinance sector. ShoreCap, DMP and DWM have also shown great commitment and foresight in these uncertain times,” said Mr. Eric Savage, Co-Founder and President of Unitus Capital.