Adani Capital acquires Essel Finance’s MSME loan business

Rajesh Kurup Mumbai | Updated on January 22, 2020

Adani Capital, the NBFC arm of the Adani Group, has acquired Essel Finance’s MSME loan business. The financial terms of the deal were not immediately disclosed.

The business has a secured loan book of about ₹145 crore, 1,100 customers and a staff strength of 40 professionals. It operates out of 10 cities in India, the company said in a statement.

“The acquisition complements our existing MSME business and helps us expand to new geographies, including Noida and Chennai. The acquisition decision was led by the fact that we operate in similar segments, which is secured lending focused on income-generating borrowers,” Gaurav Gupta, CEO of Adani Finserve Pvt Ltd, said.

Adani Capital is a wholly-owned subsidiary of Adani Finserve, which is the holding company of Adani Group’s financial services business.

“It is an opportunistic acquisition. Our near-term focus is on improvising processes, leveraging technology and enhancing productivity,” Gupta added.

As on December 31, 2019, the overall lending book of NBFC and the housing finance business was ₹1,100 crore with the latter contributing ₹150 crore. The company has over 18,000 entrepreneur borrowers and homeowners across both the business.

The gross NPAs as on December 31, 2019 stood at ₹2.4 crore, it said.

MGB Business Advisors was the financial adviser and Cyril Amarchand Mangaldas was the legal adviser for the transaction.

Adani Finserve, which primarily operates in western India, is aiming to gradually expand its geographic presence in central and east India, targeting states such as Madhya Pradesh, Chhattisgarh and Orissa. Through the geographic expansion and organic growth, the company expects the business to reach ₹2,700-3,000 crore by the end of the next fiscal.

Published on January 22, 2020

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