L&T Finance Holdings Ltd said on Friday it will wind up its West Asian wealth management unit after a planned deal to sell the business to InCred Capital couldn’t go through.
The company said in a stock-exchange filing that it feels it should exit the offshore wealth management business at the earliest and focus on growing its core businesses to maximise return for its stakeholders.
As a result, the company’s board approved a proposal to voluntarily wind up L&T Capital Markets (Middle East) Ltd subject to applicable laws of the United Arab Emirates, it said.
The shutdown of the unit will have little impact on L&T Finance as the business accounts for barely 0.1% of its consolidated income and net worth.
The decision comes just weeks after the financial services arm of engineering giant Larsen & Toubro said its deal to sell the unit was terminated after InCred couldn’t receive regulatory approvals to complete the transaction.
L&T Finance said InCred had sought approval from the Reserve Bank of India for the purchase, but the central bank rejected its proposal. The two companies explored alternatives to complete the deal but eventually decided to mutually terminate the transaction.
L&T Finance had announced the deal in November last year. The deal involved InCred Capital, the wealth and asset management unit of non-bank lender InCred Financial Services Ltd, acquiring L&T Capital Markets (Middle East) for Rs 18 crore plus cash.
The announcement had come months after L&T Finance in August last year agreed to sell the domestic wealth management arm to General Atlantic-backed IIFL Wealth Management.
Mumbai-based InCred Financial, backed by former Deutsche Bank co-CEO Anshu Jain, had launched operations in January 2017. The non-bank lender offers personal, education and home loans. It also provides loans to small and medium enterprises.
In April last year, the company raised Rs 600 crore in a Series A funding transaction led by Dutch development bank FMO. In 2016, InCred had raised Rs 550 crore from a bunch of investors including Jain.