Mahindra Finance exploring acquisitions, may list some units
MUMBAI: Mahindra and Mahindra Financial Services Ltd, which raised over ₹1,000 crore by selling shares to financial institutions earlier this month, is considering strategic acquisitions across its various verticals, a top company official said.
The company, a unit of Mahindra and Mahindra Ltd, is open to evaluating acquisition opportunities if it finds a right fit, vicechairman and managing director Ramesh Iyer said. “It has to have a good cultural fit and be relevant to what we do, as a strategy. Either it should bring a new geography or a new product. Or, it should bring a technology differentiator. We are also open to looking at acquiring select portfolios in situations where a seller may be looking to exit a particular sector. We will look at all options of organic and inorganic growth,” Iyer said in an interview.
Mint reported in September that Mahindra Finance was exploring various routes for the proposedfund-raising,including a qualified institutional placement (QIP) and a private placement of shares with private equity investors or other instituiaries tional investors.
QIP is a capital-raising tool through which listed companies can sell equity shares, fully and partly convertible debentures, or any securities other than warrants that are convertible into stocks, to a qualified institutional buyer.
“Our recent QIP will increase our capital adequacy (ratio) by another 3% and we will be at 16% level overall which is a very healthy ratio. For the next two years, we are looking at a growth of 15% and after that, we will explore the possibility of raising additional capital. All our subsid- are growing at a rapid pace and we will need to infuse more capital going forward. We are seeing a re-emergence of opportunities. Monsoon has been good this year and the issues on the regulatory front have subsided. Putting all of these together, we are seeing immense opportunities for growth,” Iyer said.
Iyer ruled out any additional fund-raising plans for the next two years, maintaining that the company will look at listing some of its subsidiaries. “The subsidiaries will follow the same path of its parent Mahindra Finance. The asset management business and housing finance business need a lot of capital. We will keep financing them to the extent they become mature and stable. We will look at opportunities to take these businesses public at an appropriate time,” he said.
The company’s subsidiaries include Mahindra Mutual Fund, Mahindra Insurance Brokers Ltd and Mahindra Rural Housing Finance Ltd.
In the second quarter of FY18, Mahindra Finance posted a 11.7% decline in consolidated net profit to ₹100.68 crore, against ₹114.04 crore last year. Total income in the quarter rose to ₹1,985.59 crore from ₹1,741.26 last year. MUMBAI: Canada Pension Plan Investment Board (CPPIB) and Singapore’s GIC Pte. Ltd are in separate negotiations with Baring Private Equity Partners India to acquire the latter’s stake in property developer RMZ Corp., two persons aware of the matter said. Baring PE holds a 21% stake in RMZ Corp., while Qatar Investment Authority (QIA), Qatar’s sovereign fund, holds 25%.
Baring’s 21% stake is valued at ₹2,400 crore, one of the two persons mentioned above said on the condition of anonymity.
CPPIB is Canada’s largest pension fund manager while GIC is a sovereign fund owned by the Singapore government.
Bengaluru-based RMZ Corp. is one of India’s leading commercial property developers.
Baring had invested ₹450 crore in RMZ 2012 while QIA invested ₹600 crore a year later.
Besides Baring, QIA is also looking to exit RMZ through a buyback option. Once the buyback deal with QIA is signed, promoter Menda family will hold 79% stake in RMZ. At present, it holds 54%.