Supplychain focused NBFC Livfin to raise $5m from EU fund soon

Promoters of the supply chain- focused non-banking lender Livfin, which has disbursed over Rs 550 crore of short-term loans since its inception 15 months ago, are planning to divest a portion of their holding to a European private equity fund to raise UDD 5 million. Since the Gurugram-based company, set by Rakesh Malhotra, who had founded and sold Luminox Inverters and currently heads the SAR group, is into 60-90-day cash credit to supply-chains in the MSME sector, it does not have a large active loan portfolio, which currently stands at Rs 110 crore.

It has set a target of more than doubling its disbursements to Rs 1,500 crore by March with an active portfolio of Rs 450 crore, Harshad Malhotra, a chief business officer of Livfin told PTI over the phone. "We will be raising at least USD 5 million from a European private equity fund. The money should come in shortly, say as early as August-September. The promoters will dilute some of their equity to the investment fund," he said without quantifying the stake dilution citing confidentiality as they are yet to sign a term sheet.

The money will be used to drive the business at an accelerated pace, Malhotra who also has a minority stake in the company, said. He also said in the second phase, the company, which has over 300 customers now, will be raising another USD 10-15 million over the next 12-18 months.

Livfin extends cash credit to customers based on their invoice, which are also anchored by their suppliers, ensuring that its funds are fully secured and thus has no bad loans. Practically its loans work out to be an overdraft facility for its customers.

As an invoice-based supply-chain financer,it primarily serves suppliers of energy storage (batteries and inverters) and e-commerce and recently entered travel aggregators, logistics providers, and home electrical segments as well. During the past financial year, it has raised Rs 100 crore from banks and NBFCs to fund its growth.