Private equity firm Warburg Pincus is in talks to invest nearly $150m in Indian lending firm Vistaar Finance, Reuters reported citing two unnamed sources. 

The deal will see the US-based investor acquire a 30% stake in Vistaar, which operates as a non-banking financial services company (NBFC), the sources said. 

The discussions are at an advanced stage and the investment will value Vistaar at around $450m, one of the sources added. 

Vistaar already counts Saama Capital and Westbridge Capital as its investors. 

Unlike traditional banks, NBFCs lend smaller amounts and target customers in towns and villages. 

“NBFCs are one of the biggest sectors for PE funds and have a proven track record of performance,” a source explained the motive behind Warburg Pincus’ investment. 

The shadow-lender was founded in 2010 and it provides small business loans to shops, hotels, mills and manufacturers. 

Vistaar is said to operate 196 branches in 12 Indian states, and it claims to have lent over $300m till now. 

The lender offers loans between $1,200 and $60,000 for five to ten years. 

One of the sources also said that the deal could include both issue of new shares and the acquisition of shares from existing investors, though it was not immediately clear which shareholders might sell their stake. 

For the financial year that ended in March 2022, Vistaar posted a net profit of $9.3m and its total income during the period stood at $54m. 

In April this year, Vistaar raised INR1.5bn from local public sector lender Bank of Baroda.