India-based Capital First Ltd agreed to acquire a 7.03% stake in microfinance company Village Financial Services.

Under the agreement, Capital First will purchase 3,125,000 equity shares of 10 rupees each at a premium of 38 rupees each, according to a July 2 bourse disclosure.

The deal is expected to close within 15 says of the investment agreement.

The nonbanking company plans to use the proceeds from the infusion to expand its presence across India and boost its gross outstanding loan portfolio, The Economic Times reported separately.

Earlier in March, Village Financial raised equity for the first time by selling a stake to Mumbai-based Param Capital, the publication noted.

As of July 2, US$1 was equivalent to 68.72 Indian rupees.