Gold loan firm Manappuram Finance Ltd has received its board approval to acquire 70 per cent stake in Asirvad Microfinance Pvt. Ltd. (AMPL), which provides micro loans, housing and festival loans to poor women, as per a stock market disclosure.
The company intends to increase its stake up to 85 per cent through infusion of additional capital and said it would commits around Rs 136 crore ($21.4 million) to buy the stake.
Asirvad Microfinance did not disclose the names of those who are selling the 70 per cent stake.
In October, the gold loan firm had signed a non-binding term sheet with Asirvad Microfinance to acquire majority equity shareholding through a combination of secondary purchase of equity shares from certain existing shareholders and primary investment by way of subscription to equity shares in Asirvad Microfinance. But it had not disclosed deal value or the quantum of stake it intended to buy.
Chennai-based Asirvad Microfinance is promoted by SV Raja Vaidyanathan. Founded in 2007, the company is present Tamil Nadu, Kerala, Odisha and Gujarat.
In September, Manappuram Finance had announced that it is looking for diversification of its business into microfinance and financing of commercial vehicles.
In March this year, Manappuram Finance agreed to acquire Milestone Home Finance Company Pvt Ltd (Milestone) from Jaypee Hotels Ltd for an undisclosed amount, as part of its plans to diversify its business by commencing housing finance activities.
Manappuram has over 3,200 branches across 25 states and four union territories with assets under management (AUM) of Rs 8,530 crore as on December 31, 2013.
The firm counts names like Baring PE India, WestBridge Capital and India Equity Partners as shareholders.
Manappuram Finance's scrip closed at Rs 32.45 each, down 0.92 per cent on BSE in a weak Mumbai market on Friday.
(Edited by Joby Puthuparampil Johnson)