Mumbai: Hinduja group’s flagship company Ashok Leyland Ltd is acquiring a 4.68% stake in its commercial vehicle financing subsidiary Hinduja Leyland Finance Ltd (HLF) from private equity firm Everstone Group, the company said in a stock exchange filing on Thursday.
Ashok Leyland will pay Rs225.42 crore to acquire the stake from Everstone Group’s Everfin Holdings, which currently owns a 14.05% stake in the company.
“The company has entered into a share purchase and shareholders agreement with Everfin Holdings, shareholder of Hinduja Leyland Finance Ltd, for acquisition of 2,04,92,676 shares of Rs10/- each constituting 4.68% in the paid-up share capital of Hinduja Leyland Finance at a price of Rs110/- per share," the company said in the filing.
Consequent to the share purchase, Ashok Leyland’s shareholding in HLF will increase from 57.22% to 61.90%, according to the filing.
HLF was founded in 2008 as a non-banking financial company. It provides customized finance for utility vehicles, tractors, cars and two-wheelers among other vehicles, focusing on the semi-urban and rural sectors.
In July 2013, Everstone had invested Rs200 crore in HLF.
Hinduja Leyland Finance recorded revenue of Rs1,486.31 crore in financial year 2016-17, compared with Rs1,145.69 crore in the previous year. In 2016-17, the company reported a profit of Rs167.53 crore, as against Rs150 crore in the previous year.
Everstone had earlier planned to divest almost 50% of its stake in Hinduja Leyland Finance through the company’s planned initial public offering (IPO).
In March 2016, HLF had filed its so-called draft red herring prospectus for its IPO with markets regulator Securities and Exchange Board of India.
However, the IPO was later deferred, Mint reported in July.
Also read: Hinduja Leyland defers IPO plans
On Thursday, shares of Ashok Leyland closed at 114.25 per share on the BSE, up 0.75%, while the benchmark index Sensex closed at 33,106.82 points, up 1.06%.