Mahindra & Mahindra Financial Services said that it has completed the acquisition of 20% of the equity share capital of Ideal Finance from its existing shareholders.
Consequently, the company's stake in Ideal Finance has risen to 58.20% from 38.20%. "Ideal Finance has become a subsidiary of the company effective 8 July 2021," the NBFC said in a statement.
On 20 August 2019, Mahindra Finance had announced a joint venture agreement with Sri Lanka-based Ideal Finance, a fully owned subsidiary of the leading Sri Lankan conglomerate, Ideal Group.
Ideal Finance is a non-banking financial Institution registered with Central Bank of Sri Lanka, with a clear focus on rural and semi-urban sector. Its lending portfolio consists of commercial trucks, motor cars, three wheelers, two wheelers, gold loans and personal loans.
The aim of joint venture is to capitalize on Mahindra Finance's 25-year expertise in the financial services domain and Ideal Finance's domestic market knowledge to build a leading financial services business in Sri Lanka.
Mahindra Finance had signed a share subscription, share purchase and shareholders' agreement with Ideal Finance and its existing shareholders and has agreed to subscribe/acquire up to 58.20% of the equity share capital of Ideal Finance, in one or more tranches, for an amount not exceeding LKR 200.30 crore.
Offering updates on the same, the company on 30 March 2021 said that it had acquired 38.20% of the equity share capital of Ideal Finance. The final tranche for acquisition of shares from existing investors was due by 31 March 2021.
Due to the COVID-19 pandemic, the parties mutually agreed to extend the date of completion of the aforesaid acquisition of shares with an intention to complete the same, latest by 30 September 2021, subject to necessary regulatory approvals.
Mahindra & Mahindra Financial Services (M&M Finance) is engaged in providing financing for new and pre-owned auto and utility vehicle, tractors and commercial vehicles.
The NBFC reported 8.4% decline in consolidated net profit to Rs 218.84 crore on 3% fall in total income to Rs 3038.37 crore in Q4 March 2021 over Q4 March 2020.
The scrip shed 0.34% to currently trade at Rs 160 on the BSE.
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