InCred Capital has agreed to acquire 100% stake in the West Asian wealth management business of L&T Finance Holdings, the latter said in a filing with stock exchanges.
The wealth and asset management unit of lender InCred Financial Services would buy the stake for Rs 18 crore ($2.5 million at current exchange rate) plus the cash and equivalent of L&T Capital Markets (Middle East). L&T Finance expects the sale within 10 months from the execution of the share purchase agreement.
The announcement comes after L&T Finance in August agreed to sell the domestic wealth management arm to General Atlantic-backed IIFL Wealth Management. At the time, the latter had said it would buy L&T Capital Markets for Rs 230 crore, plus cash and equivalent.
The development comes amid L&T Finance’s plans to scale down its portfolio of structured finance and debt capital market book to around Rs 5,000 crore by March 2020 from Rs 7,400 crore in October. In May, the company had announced plans to exit these areas.
The announcement also comes after World Bank’s International Finance Corporation led a $550 million (around Rs 3,769 crore then) investment round in L&T Finance in July. BNP Paribas, Citibank and DBS Bank also took part in the round.
Shares of L&T Finance were trading up 1.72% at Rs 97.45 apiece at the time of writing this report.
Mumbai-based InCred Financial Services, backed by formed Deutsche Bank co-CEO Anshu Jain, had launched operations in January 2017. The firm disburses four types of loans -- personal, education, home and SME (small and medium enterprise). It has a loan book of Rs 2,000 crore, primarily focused on retail lending and a presence in more than 20 cities in India with plans to expand to a number of smaller cities.
Earlier this month, InCred Financial Services launched a credit fund under its wealth and asset management arm through a partnership with a social-impact venture capital firm, VCCircle reported.
In April this year, the company raised Rs 600 crore in a Series A funding transaction led by Dutch development bank FMO. US-based asset manager Moore Strategic Ventures, Elevar Equity and early backer Alpha Capital also invested.
In 2016, InCred Financial Services had raised Rs 550 crore from a bunch of investors including Jain, former Deutsche Bank senior executive Bhupinder Singh, Manipal Group’s Ranjan Pai and Alpha Capital.