Through this acquisition , IIFL Finance and IIFL Holdings Ltd will be venturing into microfinance segment.
While filling with the stock exchanges, IIFL Holdings said that the Reserve Bank of India (RBI) had given it in-principle approval for the planned acquisition of Samasta Microfinance. The company did not disclose financial details of the transaction. All the cash based deal involved in collab is likely to be completed with six months.
“The proposed acquisition of Samasta will help IIFL to enter into microfinance segment and extend its wide-ranging financial services to their large customer base,” the filing said.
The deal is subject to completion of necessary due diligence, regulatory and other internal approvals.
In July this year, IIFL Finance raised Rs1,000 crore from CDC Group, the development finance institution owned by the UK government, in lieu of a 15.45% stake.
The capital was meant to expand its financing business and address needs of under-served segments.
IIFL Finance is in the business of home and property loans, gold loans, commercial vehicle finance, healthcare finance, loans against securities and small and medium enterprise business loans.
In the year end (31 March, 2016) , IIFL Finance’s loan book stood at Rs 17,770 crore and net profit was at Rs 340 crore.
Founded by first-generation entrepreneurs Narayanswamy Venkatesh and Deviah Shivaprasad, Samasta began operations as a microfinance institution in March 2008 and operates in Tamil Nadu, Karnataka, Maharashtra and Goa through 64 branches.
The microlender had about Rs100 crore in assets under management, as on 30 September 2016.