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IndoStar Capital Finance Ltd (IndoStar) , a non-banking finance company, has signed a binding agreement to acquire the CV finance business of India Infoline Finance Ltd (IIFL Finance), a subsidiary of IIFL Holdings Ltd.
The acquisition includes the entire CV finance AUM of Rs 3,949 crore as on December 31, 2018, comprising Rs 2,450 crore of loan portfolio and Rs 1,499 crore of securitisation/ assignment portfolio, together with a 1,337-strong employee team located in 161 branches spread over 18 states. This team has achieved a gross disbursement in excess of ₹3,000 crore for FY18 and Rs 1,723 crore for H1FY19. The boards of both companies have approved the above transaction.
Commenting on the acquisition, R. Sridhar, Executive Vice-Chairman & CEO, IndoStar Capital said, “This strategic acquisition, which is profit accretive from day one, helps IndoStar to significantly accelerate timelines in achieving our goal of becoming the leading retail finance NBFC, having a diversified and profitable asset book with strong growth prospects. I would like to take this opportunity to welcome IIFL customers and employees to IndoStar and assure them that they will experience a seamless transition and a high level of support from IndoStar ”.
Nirmal Jain, Chairman, IIFL Group, said “this is a win-win transaction for both the organisations. Given Mr. R Sridhar’s experience and credentials to lead CV financing business, IndoStar will become a significant player with scale. Our staff will enjoy seamless transition and customers will have uninterrupted service from the same people and locations. IIFL Finance will use capital to scale up its core products of affordable home loans, small business loans and gold loans. This will allow IIFL Finance to grow, without having to dilute equity in near future.”
IndoStar Capital, promoted by Everstone Group in 2011, initially started corporate lending business. Since 2015, IndoStar has been building its retail lending business, which accelerated last year with the set-up of its CV finance and affordable housing finance businesses. This acquisition would catapult IndoStar into a leading player in the attractive, high-growth CV financing space and help it build a diversified profitable lending book, with a product mix comprising CV finance, corporate lending, SME business loans and affordable housing loans.
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