LeapFrog Investments and Aavishkaar inject $48 million into Electronica Finance | Company News

Global investment firm LeapFrog Investments and impact fund manager Aavishkaar Capital have joined forces to inject $48 million as equity capital into Electronica Finance Limited (EFL), a Pune-based finance company. This investment is aimed at supporting EFL’s initiatives to fund MSMEs and rooftop solar projects in India.

The infusion of funds will not only bolster EFL’s balance sheet but also pave the way for a new phase of rapid expansion. The company plans to utilize the capital to increase financing for MSMEs in the high-growth manufacturing sector in the country.

Shilpa Pophale, the managing director & CEO of Electronica Finance, expressed that besides improving capital adequacy, the recent investment will help in reducing leverage. The goal moving forward is to maintain leverage below three times. Pophale highlighted that the collaboration with two prominent social impact investors will enable EFL to support small businesses to thrive and achieve sustainable, low-carbon growth.

Over the past five years, EFL has witnessed significant growth in its assets under management (AUM), which currently stands at close to Rs 4,000 crore. The company projects a compound annual growth rate (CAGR) of around 35% over the next three years.

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, to promote sustainable financial inclusion.

Stewart Langdon, a partner at LeapFrog Investments, emphasized the crucial role of funding in promoting financial inclusion and climate resilience for small business owners. Anurag Agrawal, a partner at Aavishkaar Capital, reiterated their commitment to supporting growing and resilient businesses, with EFL presenting a significant opportunity to strengthen the MSME market.