NBFC Hiranandani Financial Services Nets First External Funding of Rs 800 Cr, Targets Tier III & IV Businesses

MSME-focused non-banking financial company (NBFC) Hiranandani Financial Services has raised its maiden external equity fundraise of Rs 800 crore (around $91.5 million).  As part of the transaction, funds managed by investment firm Vitruvian Partners invested through its Singapore platform and acquired a minority stake in the NBFC. 

The capital infusion, according to the company, will help it expand its footprint to underserved Tier III and Tier IV markets, deepen secured lending, and fund continued investments in technology and talent.

“We already have a strong promoter in House of Hiranandani and are excited to now have a global investment firm like Vitruvian Partners backing us. The credit gap in micro and small enterprises is large, and this fundraise will help us accelerate our journey and expand our reach to support more small businesses in their growth,” said Uday Suvarna, Chief Executive Officer, Hiranandani Financial Services. 

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Backed by House of Hiranandani, the Hiranandani Financial Services Hiranandani Financial Services (HFS) has a current project GDV (gross development value) of Rs 48,000 crore and operates through a direct-to-customer model.

It offers secured business loans to MSMEs backed by property collateral with an average ticket size of Rs 10 lakh. The NBFC has a presence in nine states, primarily focused on tier III and tier IV markets. 

The company said it has built an AUM (assets under management) of around Rs 3,000 crore with a customer base of more than 30,000.

Kartikeya Kaji, who leads Vitruvian’s India investing team, said, “Hiranandani Financial Services has built an impressive foundation with a deep understanding of India’s fast-growing MSME segment. The company’s hybrid model, combining an on-the-ground presence with a strong digital technology stack, has proven both scalable and resilient.”

Alongside a direct-to-customer model, Hiranandani Financial Services leverages data from multiple sources, automated credit rule engines, mobile-first assisted onboarding, and real-time KYC to underwrite borrowers.

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Importantly, over the past few years, NBFCs have gained ground in lending to MSMEs. According to a SIDBI MSME Pulse June 2025 report, the commercial credit portfolio balances grew at a CAGR of 13 per cent between March 2020 and March 2025, reaching Rs 35.2 lakh crore by the end of the period. 

While private banks were instrumental in driving this growth with a 16 per cent CAGR, NBFCs recorded the fastest expansion among all lender categories, delivering 19 per cent CAGR during the same period. 

NBFCs saw their business loans segment grow at a robust 39 per cent CAGR over the five-year span, making up 23 per cent of their portfolio balances as of March 2025.