Subhash Chandra-promoted diversified business group Essel has decided to acquire Bangalore-based BSS Microfinance Pvt Ltd for Rs 90 crore (approximately $13 million), according to a news report by Business Standard.
The acquisition is part of the company's efforts to have a presence in four segments — small and medium size units funding, financing those at the bottom of the pyramid, housing finance and equipment finance.
When contacted by VCCircle, a senior executive of Essel Finance said there is no truth in the report and added, "We are talking to a couple of micro finance institutions (MFIs) for acquisition but have not zeroed in on any as of now. If we go ahead with a deal, it won’t be with the company that has been reported."
In a separate statement, BSS said that the media reports saying Essel group buying BSS Microfinance are not correct and are not based on facts.
RBI-registered BSS Microfinance Pvt Ltd took over the microfinance operations of Bharatha Swamukti Samsthe (BSST) in 2008.
Presently, BSS Microfinance is offering loans for income generation activities, life quality improvement, etc with repayment periods ranging from 18 to 54 fortnights (little more than two years).
For the financial year 2015-16, BSS clocked net interest income (NII) of Rs 31.95 crore against Rs 26.23 crore for the previous financial year, an increase of 22 per cent.
Essel group has presence in various sectors, including media, entertainment, packaging, infrastructure and education and technology among others. The group's listed entities have a combined market capitalisation of over $6 billion.
In November, the group said it is also looking to enter into affordable housing segment with plans to develop 10,000 homes next year involving an investment of Rs 800 crore.
The article has been updated with some additional information that was gathered after it was originally posted.