2024-09-27 15:40:00 :
Investors and promoters of IKF Finance are looking to sell a controlling stake in the Hyderabad-based non-bank lender in a deal that could value it at $200-250 million, three people familiar with the matter said.
“Motilal Oswal PE, which holds a large minority stake in the company, is looking for an exit and may also do some major financing, leading to the sale of the majority stake,” one of the people said.
Motilal Oswal Private Equity (MOPE) first invested in IKF Finance in 2015. Last April, IKF Finance raised funds $250 crore in a funding round led by Accion Digital Transformation Fund.
“The deal, subject to buyer interest, will most likely be sold at full price if the price is right,” said the second of the three, who all requested anonymity.
The person said the promoters may cede control to a new buyer due to the lack of a second generation to run the business.
E-mail queries sent to Motilal Oswal Group and IKF Finance did not elicit any response.
IKF Finance was founded in 1991 by VGK Prasad and operates in the commercial vehicles, construction equipment, three- and four-wheeler sectors and SME financing.
As of December 31, 2019, the promoters held 42.84% stake, followed by two funds (India Business Excellence Fund II – 11.12% and IIA – 18.60%) managed by Motilal Oswal Private Equity.
Accion Digital Transformation Fund holds 7.96% of the company’s shares, and Teachers Insurance and Annuity Association holds 7.96% of the company’s shares.
continued growth
IKF Finance’s total revenue increased to $287 crore in 2022-23 $Net profit in the previous year was Rs 221 crore, while net profit improved to $500 million from $40 crore, according to Care Ratings.
In the first nine months of fiscal year 2024, IKF’s net profit was $Total revenue Rs 47 crore $3 billion, return on total assets was 2.11% and credit cost was 0.51%.
IKF Finance is able to achieve continued growth with comfortable capital.
In the three years ended March 31, 2023, IKF’s compound annual growth rate was 23%, from $1,315 crore as on March 31, 2020 Rs. $The figure stood at Rs 2,452 crore as of end-March 2023, Care Ratings said in a statement.
In fiscal year 2023, IKF disbursed loans amounting to $1,674 crore, an increase of 71% over FY22.
In the first nine months of fiscal year 2024, IKF Finance paid $1,725 crore, taking its assets under management to $3,222 crore as on December 31 $2,452 crore as on March 31, 2023.
Auto finance remains a key focus area for IKF Finance. As of December 31, the assets accounted for approximately 77% of the bank’s total assets under management.
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