U.S. private equity firm Warburg Pincus will acquire a majority stake in India's Vistaar Finance, the small-business lender said on Monday, underscoring the rising investor interest in the Asian nation's booming lending market.

Terms of the deal were not disclosed. Vistaar Finance did not immediately respond to Reuters' request for details of the deal.

"We believe micro-enterprises in semi-urban and rural India are underserved by formal sources of credit and we believe Vistaar has the potential to fulfil that need gap ...," Narendra Ostawal, a managing director at Warburg Pincus, said in a statement.

As per an earlier reprt, Warburg was in discussions with Vistaar to buy a 30% stake in the shadow lender for $150 million, valuing Vistaar at roughly $450 million. read more

Non-banking financial services companies like Vistaar lend smaller amounts than traditional banks do and target mostly customers in towns and villages. By March 2021, India's NBFC sector had assets worth more than 54 trillion rupees.

Warburg will buy the stake from WestBridge Capital, Elevar Equity, Omidyar Network India and Saama Capital which are all exiting the company.

Vistaar manages assets of over 26 billion rupees ($315.47 million) and has a presence across 12 states with 205 branches.

Over the past two decades, Warburg has invested more than $5 billion in India. Its NBFC bets in India include education-sector lender Avanse Financial Services and Fusion Microfinance.