Gold loan firm Manappuram Finance Ltd has signed definitive agreements to acquire Milestone Home Finance Company Pvt Ltd (Milestone) from Jaypee Hotels Ltd for an undisclosed amount, as per a stock market disclosure.
Founded in 2010, Mumbai-based Milestone holds licence to provide home finance from National Housing Bank (NHB).
Its parent Jaypee Hotels operates six properties spread across New Delhi, UP and Uttarakhand. It’s part of the Jaypee Group which has a presence in engineering & construction, power, cement, real estate, hospitality and expressway & education sectors.
Through this acquisition, Manappuram plans to diversify its business by commencing housing finance activities.
"With a pedigree in gold asset backed lending, home asset backed lending is a very synergetic expansion for Manappuram and is expected to add significant value to shareholders, said VP Nandakumar, MD & CEO of Manappuram Finance.
I Unnikrishnan, executive director and deputy CEO of Manappuram, said that given Manappuram's pan-India reach with over 1.5 million customers, it is ideally placed to expand in the Rs 8,20,000 crore Indian home finance industry, which is currently growing at a CAGR of 19 per cent as a result of India's burgeoning consumer base.
Manappuram has 3,293 branches across 22 states and four union territories with assets under management (AUM) of Rs 8,530 crore as on December 31, 2013.
The firm, which counts names like Baring PE India, WestBridge Capital and India Equity Partners as shareholders, is currently raising $16 million via NCDs.
ICICI Securities and Amarchand & Mangaldas & Suresh A Shroff & Co acted as the exclusive financial advisor and legal advisor, respectively, to Manappuram on this deal.
(Edited by Joby Puthuparampil Johnson)