New Delhi, Sept. 19 -- Kolkata-headquartered Dhruva Capital Services, a non-bank lender engaged in the business of investment and financing, has announced a strategic merger with Odisha-based Vector Finance, making its entry into the microfinance segment.
The merger is subject to approvals from the National Company Law Tribunal (NCLT), other competent authorities, and the shareholders and creditors of both companies, Dhruva Capital said in a notification to stock exchanges.
With a loan book of Rs 390.2 crore ($44.2 million), Vector Finance operates across six states, primarily in eastern and northeastern India. It claims to have disbursed Rs 222.7 crore to 43,274 customers, with total revenue from operations standing at Rs 27.2 crore as of March 31, 2025.
In 2019, the microfinance company raised $1.96 million (around Rs 14 crore then) from Alten Capital, Bhaskar Achanti, and others via preferential allotment, according to VCCEdge.
The acquisition comes at a time when the microfinance industry is recovering from a period of rising delinquencies, loan losses, and weak profitability. Analysts say the sector's stabilization has been aided by stricter lending norms and easing credit costs.
"The merger will help reduce the overall cost of borrowing besides providing access to additional capital, which, in turn, will help the company further improve its topline and also endeavour to reduce interest rates for customers," said Rahul Johri, chairman, Vector Finance.
"This integration will enhance our ability to serve customers across segments, expand our product suite, and unlock synergies in operations and capital efficiency," he added.
Dhruva Capital offers various loan products, including business loans, invoice discounting, loans against property, construction finance, personal loans, gold loans, and affordable home loans.
The company posted a net loss of Rs 1.1 crore in FY25, compared with a Rs 4.3 crore profit in FY24, as sizable loan loss provisions weighed on its bottom line.
Dhruva Capital has also witnessed some high-profile exits in recent months. In August, CEO Prodyut Purkait resigned to focus on his commitments in other ventures as an entrepreneur, while chief financial officer Amit Rathi resigned earlier, citing inability to devote time to board affairs.
Following the merger announcement, the shares of Dhruva Capital hit the 5% upper circuit on the BSE on Friday.
Published by HT Digital Content Services with permission from VC Circle.