Manappuram Finance Ltd, a major gold loan NBFC, has decided to enter the housing finance sector by acquiring Milestone Home Finance Company Private Ltd from Jaypee Hotels Ltd for an undisclosed sum.
Manappuram believes that this is a natural progression because of the great synergy between the two activities-gold finance and home finance.
In its filings with the stock exchanges, MFL said it has signed definitive agreements to acquire Milestone Home Finance from Jaypee Hotels subject to requisite approvals. It plans to diversify its business by entering the housing finance business. VP Nandakumar, MD & CEO, MFL, viewed it as a "very synergistic expansion" for the company and felt that it would "add significant value to shareholders".
I Unnikrishnan, ED & Deputy CEO said that MFL with its a pan-India customer base of 1.5 million+ , MFL was "ideally placed" to expand in the housing finance sector that was witnessing a 19 per cent compounded annual growth rate.
ICICI Securities acted as the exclusive financial advisor to MFL in the deal. The financial cost of acquisition was not however disclosed.
Shares of MFL were up by 65 paise to Rs 22.65 (share face value Rs 2) on the BSE.