Capital First receives ‘Outstanding Corporate Transformation India 2018’ award by Capital Finance International 2018
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The transformation of Capital First (2010 to 2018) has been remarkable. In 2010, the company focused on equity broking, foreign exchange, asset management and had a handful of real estate developer customers representing $140m in loans. In 2010, the company defined a new mission and started to finance MSMEs, self-employed and consumers. Loans as low as $300 to $100,000 became the new focus. Green-field technologies were developed to provide financing to target markets. Despite slowing economic growth, high inflation, and rising interest rates, the company successfully underwent a leveraged MBO led by V Vaidyanathan. This involved an open public offer, fresh capital of $15m, reconstitution of the board and the name-change to Capital First. Subsequently, the company has diversified its borrowing to 300 lenders, and reduced costs from a high of 14% to as low as 9%. Asset quality improved sharply with net non-performing reducing from 3.4% to 1.0%. The company has now financed seven million customers and over 40% of these were first-time borrowers. Retail loan book increased from $14m to $4b. Company losses of $5m annually (2008 and 2009) turned into profitability of $48m in financial year ending March 2018. Credit rating improved from A+ to AAA and capitalisation increased multi-fold to $1.2b. In a 2018 breakthrough, Capital First obtained a banking licence by merging with an existing bank. Shareholders approved the deal with over 99.9% of votes in favour. The CFI.co judges agree that the Capital First management buyout story has resulted in an equally inspiring corporate transformation in India and the 2018 award is applauded.
KRM Tower, 7th Floor, No. 1,
Harrington Road, Chetpet,
Chennai - 600031, Tamil Nadu,
Bandra East, Mumbai - 400051,
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