Ambit Finvest Pvt. Ltd, a unit of Ambit Group, has bought the small and medium enterprises (SME) lending business of Finmax Credit & Finance Pvt. Ltd to diversify its asset base.
Under the terms of the transaction, all 140 employees of Mumbai-based Finmax led by CEO Sanjay Agarwal will join Ambit Finvest, the buyer said in a statement. It didn't disclose financial terms of the deal.
Finmax has an SME loan book of more than Rs 200 crore, with a ticket size ranging between Rs 2 lakh and Rs 2 crore.
According to Finmax's website, the company operates in three segments--secured and unsecured SME lending, and structured finance, which includes bill discounting, loan against property, lease rental discounting and working capital term loans.
A June credit rating report by Acuite Ratings and Research said the share of unsecured loan portfolio in Finmax's total book fell to 32% by 31 March 2018 from 46% as on 30 November 2017. The share of loan against property, a secured loan, increased to 39% from 28% while term loans and working capital demand loans constitute roughly 16% and 8%, respectively.
Finmax has presence in Maharashtra, Gujarat, Rajasthan, Madhya Pradesh, Punjab and the national capital region.
Ambit Finvest has, over the past 18 months, built a structured finance business in India, providing customised wholesale lending products to its customers. The acquisition of an SME lending business is an integral part of its strategy to diversify its asset base, it said.
“We have ambitious plans for our lending business and would like to capitalize on the highly attractive growth potential in the SME space," said Ashok Wadhwa, group CEO at Ambit.
After the acquisition, Ambit Finvest will be led by executive chairman Sanjay Sakhuja. The top management will also comprise Vikrant Narang, CEO of structured finance; and Sanjay Agarwal, CEO of SME and retail lending.
Ambit Finvest's products include capital market financing, structured business lending solutions, real estate and mortgage funding, special situation financing and debt advisory.
Ambit Corporate Finance was the exclusive financial adviser to the transaction. Wadia Ghandy & Co was the legal adviser.
Ambit Group has been involved in several transactions over the past couple of years. For instance, it sold its hedge fund business in 2016 and tied up with JC Flowers & Co for an asset reconstruction venture the same year.
In April this year, Ambit founder Wadhwa acquired Qatari investment firm QInvest LLC’s 26% stake in the financial services group. VCCircle had reported in March last year that QInvest was looking to divest its stake in Ambit Pvt. Ltd.