Manappuram Finance, a leading non-banking financial services firm, recently stated in a regulatory filing that it has come to an agreement to pick up an 85.39% stake in Indian School Finance Company (ISFC) from the current shareholders of the firm. The company’s board members approved this acquisition deal in a meeting that was held on 2 July 2018.
Further, Manappuram Finance also announced that it has come into a transfer restriction agreement with ISFC and a few shareholders of the firm. It is expected that the total cost of the acquisition will come up to Rs.212.20 crore.
The Indian School Finance Company is also a non-banking finance company that has been registered with the Reserve Bank of India. The company provides loans to schools, vocational colleges, coaching centers, teachers, etc. in an effort to help institutions and educators build infrastructure to provide quality tutoring and education to students across India.
IFSC has a pan-India reach, with a presence in around 116 locations in India. The company has a total workforce of around 300 employees. IFSC’s assets under management (AUM) for FY15-16 was Rs.154.20 crore. This increased to Rs.285.30 crore during FY16-17. For the financial year that ended in March 2018, the company’s AUM stood at Rs.522.59 crore.
Manappuram Finance announced that the acquisition will help it facilitate its business growth, given that business has been profitable in the past and since this is a niche industry. The acquisition, however, is subject to the company receiving approval from the RBI and certain other customary conditions.
Sources: The Economic Times, Business Standard, Equity Bulls