Sundaram Finance Ltd said on Thursday it has agreed to acquire BNP Paribas Personal Finance’s entire 49.9% stake in their housing finance joint venture.
Sundaram Finance currently holds a 50.1% stake in Sundaram BNP Paribas Home Finance Ltd and the acquisition will make it a wholly-owned subsidiary, the non-bank lender said in a statement.
The value of the transaction was not disclosed. The deal is subject to all regulatory approvals.
“The financial services sector, specifically the housing finance sector, is poised for significant growth once the consolidation activity which is underway after the recent spate of volatility is completed,” said TT Srinivasaraghavan, managing director of Sundaram Finance.
“Given the strong synergy with the parent’s auto lending and related businesses, this will further strengthen our footprint in the retail financial services space,” he added.
Sundaram BNP Paribas Home Finance reported a net profit of Rs 145.48 crore in the financial year 2018-19.
In the previous fiscal, it reported a net profit of Rs 136.4 crore on a managed asset base of Rs 8,990.4 crore ,compared with a net profit of Rs 153.6 crore on a total asset base of Rs 8,358 crore in 2016-17.
Sundaram BNP Paribas Home Finance was incorporated in July 1999 as a subsidiary of Sundaram Finance to offer specialised housing finance services to the retail sector in India.
To further leverage the market potential, Sundaraman and BNP Paribas Personal Finance, a wholly-owned subsidiary of BNP Paribas France, entered into a joint venture agreement in 2007 whereby BNP Paribas Personal Finance acquired a 49.9% equity stake in the company.
Deals in the segment
Earlier this week, state-run Canara Bank said it had revived efforts to sell a stake in its home finance subsidiary, more than a year after calling off the divestment plan.
Also this week, VCCircle reported that diversified conglomerate Piramal Enterprises was eyeing the portfolio of an embattled housing finance company.
In February this year, Blackstone Group, the world's largest private equity firm, inked a pact to acquire Aadhar Housing Finance Ltd from controlling shareholders Dewan Housing Finance Corporation Ltd, financial services group Wadhawan Global Capital Ltd as well as group chairman Kapil Wadhawan and his family.