L&T Finance Holdings Ltd, the financial services arm of the engineering conglomerate Larsen and Toubro, has acquired (IPHFL) (formerly known as AIG Home Finance India Ltd), a Delhi-based housing finance firm, according to the company’s announcement to the stock exchanges on Monday. However, the deal value is not immediately known.
In response to an e-mail query from VCCircle, the company spokesperson said, “The valuation of any NBFC will always be on the basis of book value. However, we are not in a position to disclose the actual consideration. We do this, as a matter of governance, when the final consideration is paid. Today, we have only signed an agreement to do the transaction. So you will have to wait for the price and valuation.”
IPHFL, which entered the retail finance market in 2007, had a loan book of Rs 193.5 crore in FY2011-12. Currently, it has 34 branches spread across southern and western India and L&T Finance Holdings plans to widen its presence further – both geographically and by customer segments.
N. Sivaraman, president & whole time director of L&T Finance Holdings, said, “With this acquisition, LTFH has taken the first step to go beyond its asset finance orientation into the consumer finance domain. We chose the route of acquiring a small, operating business as our route to enter this market, because it brings a fully functional operating platform, is registered with the NHB and has a well-experienced team of mortgage experts. Add to that our already existing national reach – an all India capacity of sales, credit and service – and you have ideal conditions for quick growth.”
“The housing finance business requires a separate entity that has an NHB registration and other infrastructure to effectively do that business. The plan is to hold this entity as such, without any merger, as a 100 per cent subsidiary of L&T Finance Holdings,” the company said.
According to the company, mortgage and loan against property business is the logical next step in building the L&T franchise in the home owners’ market.
L&T Finance Holding’s stock price jumped 2.93 per cent to reach Rs 49.15 a share on the BSE at 1 pm on Monday.