Adani Capital buys Essel Finance’s MSME lending biz

THROUGH THE DEAL, ADANI CAPITAL HAS SECURED A LOAN BOOK OF AROUND ₹145 CRORE

MUMBAI: Adani Capital Pvt. Ltd, the non-banking financial company (NBFC) arm of Adani Group focused on and micro-entrepreneurs, has acquired Essel Finance’s micro, small and medium enterprises (MSME) loan business.

Through the acquisition, Adani Capital has secured a loan book of around ₹145 crore, operating out of 10 cities, comprising approximately 1,100 customers and 40 employees.

This is the second asset of debtladen Subash Chandra group that Adani has acquired.

In August 2019, Essel Group had announced its intention to sell 205 megawatts (MWS) of its operational solar energy assets to Adani Green Energy Ltd at an enterprise value of ₹1,300 crore.

“The acquisition complements our existing MSME business and helps us expand to new geographies, including Noida and Chennai,” said Gaurav Gupta, chief executive, Adani Finserve Pvt. Ltd, the holding company of Adani’s financial services business.

“We operate in similar segments, which is secured lending focused on income-generating borrowers. It was an opportunistic acquisition for us; in the next 6-12 months we are more focused on improvising processes, leveraging technology and on productivity improvements,” he added.

Adani Finserve is engaged in the lending business through two companies—adani Capital and Adani Housing Finance.

The housing finance arm is only engaged in affordable home loans and does not lend to real estate builders for project construction.

Adani Capital lends to micro and small entrepreneurs across four verticals—farm, primarily tractor loans, commercial vehicle loans for both new and used vehicles, MSME loans and for supply chain.

“We want to be the most economical and convenient lender to this unbanked segment, which either doesn’t get formal finance or gets finance at very unreasonable rates of interest,” said Gupta.

According to Gupta, collectively, the NBFC and the housing finance businesses had a loan book of ₹1,100 crore as on December, with the latter contributing ₹150 crore. The lender claims to have over 18,000 customers across its two businesses. The gross NPAS as on December 31 stood at just ₹2.4 crore, Gupta said.