Manappuram Finance Ltd will acquire over 85 per cent stake in Hyderabad based Indian School Finance Company (ISFC) a lender in the education sector, for consideration of Rs 2.12 billion.
Manappuram in a filing with stock exchange BSE said the acquisition will facilitate Company’s business growth on account of a strategic partnership between ISFC and Company.
Being a niche sector and since business is both scalable and profitable, the acquisition will be a key growth driver for Company. ISFC is a registered Non-banking finance company with Reserve Bank of India.
Manappuram Stock was trading flat at Rs 98 per share on BSE.
ISFC had Assets under Management (AUM) of Rs 5.22 billion in Fy 2018, Rs 2.85 billion in Fy2017 and Rs1.54 billion in FY 2016.
The board of Directors of Manappuram Finance has authorized to enter into securities purchase agreement for the acquisition of 85.39% of the share capital from existing ISFC shareholders.
The deal is subject to the approval of the Reserve Bank of India and other customary conditions precedent. It would take eight months to complete the transaction.
ISFC, incorporated on May 9, 1994, is a private limited company incorporated under Companies Act, 1956 and having its registered office at Hyderabad, Telangana.
ISFC is engaged in extending loans to educational institutions (including purchase of buses), teachers and other education sector loans. The finance company has served over 2.6 million students through approximately 4500+ institutions since its inception.
It has a country-wide footprint spanning 116 locations across 15 states in India through a hub & spoke model with an employee base of over 300 employees. Current Credit rating of ISFC is [ICRA] BBB-(Positive).