New Delhi: India Infoline Finance Ltd (IIFL Finance), a non-banking finance company and unit of financial services firm IIFL Holdings Ltd, will venture into the microfinance segment with the acquisition of Bengaluru-based microlender Samasta Microfinance Ltd.
In a filing 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.
The all-cash deal 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 ended 31 March, IIFL Finance’s loan book stood at Rs17,770 crore and net profit was at Rs340 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.