Bengaluru: Digital lending company for small business Zen Lefin, known by its trade name Capital Float, has raised Rs 17 crore from IFMR Capital Finance and its alternative investment fund by allotting nonconvertible debentures (NCDs), bringing the company’s total capital raised through the route this financial year to Rs 60 crore.

NCDs are loan-linked bonds that cannot be converted into stocks but offer a higher rate of interest than convertible debentures. Capital Float allotted NCDs to IFMR Capital Finance and IFMR Fimpact Long Term Multiasset Fund in December, as per documents filed with the registrar of companies. The digital lender said the capital will be used to lend to existing and new small and medium enterprises (SMEs).

“The NCD raise is for strengthening our lending books. This will enable us to fulfil the working capital requirements of SMEs; for both repeat borrowers from our existing customer base and for new customer acquisition,” said Sashank Rishyasringa, Co-Founder of Capital Float. The company sees NCDs as a good alternate for fund raising, in addition to raising capital via term loans from banks and other financial institutions, Rishyasringa said.

“This NCD raise is in line with our overall strategy to deepen our liability side and will help us in achieving much better assets and liability management (ALM). We are always on the lookout for an opportune time to raise NCD at competitive borrowing rates,” he added

IFMR Capital offers access to debt capital markets to institutions that work on financial inclusion. Last year, its subsidiary IFMR Investments had launched the IFMR Fimpact Long Term Multi Asset Class Fund, a debt fund of Rs 250 crore registered with the Securities and Exchange Board of India (Sebi) as a Category II Alternative Investment Fund (AIF).

IFMR Capital but did not get a response till the time of going to the press.

Source: The Economic Times