India Infoline Finance, a subsidiary of IIFL Holdings, has signed a binding agreement with IndoStar Capital Finance, a non-banking finance company (NBFC), to sell its commercial vehicle (CV) finance business.
The acquisition includes the entire CV finance assets under management (AUM) of ₹3,949 crore as on December 31, 2018, comprising ₹2,450 crore loan portfolio and ₹1,499 crore securitisation/assignment portfolio, according to a joint statement issued by IIFL and IndoStar.
The deal will enhance the AUM of IndoStar from ₹7,748 crore as on December 31 to ₹11,697 crore, with the share of retail AUM pegged at 62% or ₹7,217 crore. The number of branches of the NBFC would also increase to 320 across 18 States servicing 75,000 customers.
Staff strength
Incidentally, IndoStar will also acquire a total of 1,337 employees spread across 161 branches in 18 States as part of the deal, the statement said. With this, the CV finance business of Indostar will see the staff strength increase to 2,337. Meanwhile, IIFL Finance will continue to focus on its core business of affordable home loans, small business loans, gold loans and microfinance while looking for growth in these segments through organic and inorganic means.
IIFL Finance had an AUM of ₹36,400 crore as on December 31 with CV loans accounting for 11% of the AUM.
