DMI Finance acquires 16% in Alchemist ARC

DMI Finance today announced its foray into the asset reconstruction space by acquiring 16 per cent stake in Alchemist ARC for an undisclosed sum.

“Having made considerable progress in building our loan origination pipeline, we felt the need to expand our current product offerings and enter the ARC space as it offers considerable growth opportunities,” DMI Finance co-founder, Mr Yuvraj C. Singh, said in a company release.

DMI Finance did not reveal the deal value.

Industry sources said the sum involved is around Rs 32 crore, valuing Alchemist ARC at Rs 200 crore.

“We are confident that our strategic partnership with Alchemist will play a key role in redefining the ARC segment in the country,” he added.

Set up in 2009, DMI Finance is a non-banking financial company which specialises in the senior-secured lending space. It is one of the top 25 NBFCs in India by equity having $100-million capital base.

“Our investment in Alchemist showcases our commitment and desire to build a different type of financial services business in India,” Mr Shivashish Chatterjee, another co-founder of DMI Finance, said.

The asset reconstruction space is considered to be highly regulated and has 13 players.

Alchemist ARC has the highest profit as a percentage of its capital and is among the top three in the industry in terms of profit-after-tax.

It also has the second highest investments in distressed financial assets as a percentage of its share capital. Apart from DMI, it has three more sponsors.

Mr Alok Dhir, Non-Executive Sponsor Director, Alchemist ARC, said the association with DMI Finance would help the company to easy access to debt for restructuring the assets.