Sequoia Capital India and US-based Norwest Venture Partners have led a $50 million (Rs.333 crore) equity investment in Chennai-based lending firm Five Star Business Finance, the non-banking financial company. Five Star Business Finance will use the funds primarily towards expanding its loan book, which currently stands at Rs.550 crores, and to enter new markets– Maharashtra and Madhya Pradesh.
Belgium-headquartered WABCO Holdings Inc. has acquired Bengaluru-based telematics startup AssetTrackr in a bid to expand its global fleet management solutions (FMS) business to India. WABCO is a leading global supplier of technologies and services that improve the safety, efficiency and connectivity of commercial vehicles. With the acquisition, WABCO will link AssetTrackr’s local market and systems expertise with its own telematics solutions.
Bengaluru-based StayAbode, which helps build co-living spaces, has raised an undisclosed amount from Incubate Fund and a clutch of investors from the real estate industry, including Sanjay Shenoy, MD of Legacy Global Projects and Mridul Upreti, former Joint MD of JLL India. The capital raised in this round will be used to scale the business by strengthening the technology back-end and the team.
Banger Tech Pvt. Ltd, which operates digital milk delivery startup Doodhwala, has raised an undisclosed amount of angel funding from Tom Varkey, a partner at US-based hedge fund Stonehill Capital. The Bangalore-based startup plans to use the pre-Series A funds for technology ramp-up, market expansion, and to increase the team size.
In its policy statement released last week, the monetary policy committee (MPC) of the Reserve Bank of India (RBI) pointed out that the implementation of farm loan waivers across states could hurt the finances of states and make them throw good money after bad, and stoke inflation. So far, three major states—Uttar Pradesh (UP), Punjab and Maharashtra—have announced large-scale farm debt waivers. The cumulative debt relief announced by the three states amounts to around Rs.77,000 crore or 0.5% of India’s 2016-17 GDP. If poll-bound states—including Gujarat, Karnataka, Rajasthan and Madhya Pradesh— too announce farm debt waivers and extend it to one-third of farm loans in their respective states, then the aggregate amount of farm debt waivers before the 2019 elections would balloon to Rs.2 trillion, or 1.3% of India’s GDP. The current cost of debt waivers, though large, is not yet alarming. But what if all states, and not just the poll-bound ones, decide to waive farm loans, and extend it to half of all farm debt rather than just one-third? In such a case, the total waiver amount will substantially increase to Rs6.3 trillion or around 4% of the GDP. The impact on state finances could have been justified had the waivers provided meaningful relief to India’s distressed rural economy. But that is unlikely to happen since the poorest farmers in India typically rely on non-institutional sources of credit.