IndoStar to acquire Commercial Vehicle finance
business of IIFL Rs. 3,949 Crs. AUM, 161 Branches, 1,337 Strong Team and 53,457
Customers
Business complementarity and
significant growth potential drives the deal for IndoStar
·
Total AUM will
increase to Rs. 11,697 Crs. from Rs. 7,748 Crs. as at 31st December 2018 with
Retail AUM at Rs. 7217 Crs - 62% of the total
·
No. of
branches will increase to 320 with Pan India presence in 18 states servicing
75,000 customers
·
CV finance
team strength will increase to 2,337
·
IIFL Finance
to continue to focus on its core business of Affordable Home Loans, Small
business loans, Gold Loans and Microfinance and look for growth in these
segments through organic and inorganic means.
IndoStar Capital Finance
Limited (IndoStar), one of the leading
NBFCs in the country, has signed a binding agreement to acquire the CV finance
business of India Infoline Finance Limited (IIFL Finance), a material
subsidiary of IIFL Holdings Limited. The acquisition includes the entire CV
finance AUM of Rs. 3,949 Crs as on 31st December, 2018, comprising of Rs. 2,450
Crs of loan portfolio and Rs. 1,499 Crs of securitisation/assignment portfolio,
together with 1,337 strong employee team located in 161 branches spread over 18
states. This team has achieved a gross disbursement in excess of Rs.3,000Crs.
for FY18 and Rs. 1,723 Crs for H1FY19. The boards of both companies have
approved the above transaction.
IIFL Finance is a
diversified NBFC providing small-ticket loan products to its customers
including Mortgages, loans against property, construction finance, gold loans,
SME loans, capital market and micro-finance loans. It had AUM of Rs. 36,400 Crs
as on 31st December, 2018; CV loans constituted 11% of the AUM. IIFL intends to
exit this business and focus on its core focus areas of home loans, SME, gold
and micro-finance loans.
IndoStar Capital, promoted
by Everstone Group in 2011, initially started corporate lending business. Since
2015, IndoStar has been building its retail lending business which
IndoStar Capital Finance
Limited BSE: 541336 | NSE: INDOSTAR | Bloomberg: INDOSTAR:IN
IIFL Holdings Ltd BSE:
532636 I NSE: IIFL I Bloomberg: IIF:IN
accelerated last year with
the set-up of CV finance and Affordable Housing Finance businesses. This
acquisition is truly transformational and would catapult IndoStar into becoming
a leading player in the attractive high growth CV financing space and help it
to build a diversified profitable lending book with a product mix comprising CV
Finance, Corporate Lending, SME Business Loans and Affordable Housing Loans.
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 commented that “this is a win-win transaction for both the organizations.
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.
” IIFL’s investment banking
team was the exclusive advisor to the transaction.
About IndoStar Capital
Finance Limited:
IndoStar is a non-banking
finance company "NBFC" registered with the Reserve Bank of India as a
systemically important non-deposit taking company. Promoted by Everstone Group,
IndoStar is a professionally managed and institutionally owned organization
which is engaged in providing structured term financing solutions to
corporates, used and new commercial vehicle financing for transporters, and
loans to SME borrowers, affordable Home Finance through the wholly-owned
subsidiary IndoStar Home Finance Private Limited. IndoStar has an AUM Rs. 7,748
Crs as on 31st December 2018. Strongly capitalized with a net-worth of Rs.
2,928 Crs as on 31st December 2018, IndoStar offers a wide range of loans to
more than 21,000 customers.
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