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Centrum Financial Services, Centrum Group’s NBFC arm, has entered into an agreement to acquire L&T Finance’s supply chain finance business, which has a loan book of about Rs 800 crore. L&T Finance is a subsidiary of L&T Finance Holdings.
L&T Finance’s supply chain finance business employs 50 professionals and operates out of 16 cities in India.
“As part of our strategy, strengthening our SME lending business is a key focus area for us. The supply chain finance business is a fast growing area and we wish to increase our presence in this space. This acquisition will be a natural fit in our portfolio and will be a profitable accretive business in the first year itself,” Ranjan Ghosh, MD & CEO of Centrum Financial Services, said.
“It will also give us lucrative cross selling opportunities. We plan to infuse additional capital and are confident that the acquired L&T Finance team will play a significant role in helping us grow the business,” he added.
L&T Finance’s supply chain vertical provides working capital finance to entities that are suppliers to large industrial manufacturers and original equipment manufacturers (OEMs). The company, with a combined customer base of about 800, also provides channel finance and inventory finance to dealers.
“This move is in line with L&T Finance’s dual objective of concentrating on our core strengths and retailisation of our overall lending book. Within the wholesale finance book, we continue to focus on the renewables, roads and transmission sectors, where we have built a leadership position,” Virender Pankaj, CE – Wholesale and Group Head – Sell Down, L&T Financial Services (LTFS), said.
The Centrum Group, through its NBFC, offers commercial finance, structured credit, supply chain and real estate finance to SMEs and MSMEs. Its other lending services include affordable housing finance and micro finance. In November 2017, it had acquired the micro finance business of FirstRand Bank India and took on board its 300 employees and 25 offices.
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