Non-banking financial company Magma Fincorp Ltd has received an approval from its board to acquire the 26% stake held by its joint venture partner in Magma ITL Finance Ltd, the company said in a stock exchange filing.
The value of the deal, however, has not been disclosed, but Magma ITL Finance will become a wholly-owned subsidiary of the company after the closure of this deal.
Magma Fincorp had got into a partnership with auto company International Tractors Ltd to set up the Kolkata-based non-deposit taking non-banking financial company Magma ITL Finance. The JV commenced its commercial operations in July 2008 and is engaged in the business of financing tractors.
In 2016-17, the joint venture entity reported net loss of Rs 29.69 crore. It had disbursed loans of Rs 272.92 crore during the period.
Magma Fincorp is backed by private equity firms Kohlberg Kravis Roberts (KKR), ChrysCapital, True North, LeapFrog Investments and World Bank’s private investment arm International Finance Corporation.
Magma Fincorp’s consolidated net profit stood at Rs 12.7 crore on an operating income of Rs 2,344.5 crore. It has a gross non-performing asset of 6.7% on the total loan book. As on 30 June 2017, the company has consolidated loan assets of Rs 17,796 crore.
Magma Fincorp also has presence in the general insurance business through a joint venture with Germany’s HDI Global SE, while Magma Housing Finance is a fully-owned subsidiary of the company.
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