Muthoot Finance picks up 30% stake in Lankan NBFC for $2.1m

Tags: News
Facing growth headwinds following regulatory tightening, leading pure-play gold financier Muthoot Finance today announced branching out to neighbouring Sri Lanka by acquiring a 30 per cent stake in Asia Asset Finance for $ 2.1 million.

The south-India based company acquired 1,67,785,600 shares in the Sri Lankan financial service firm, which is listed on the Colombo Stock Exchange, from Asia Capital, a major shareholder in the company.

Through the investment, Muthoot will help the Lankan firm operationalise loan against gold ornaments business in the island nation, the Kochi-based Muthoot said in a statement.

Asia Asset Finance, which has been in the lending business since the 1970s, is involved in retail finance and business loans, and operates from 11 branches in the island nation.

Muthoot also expects the company to improve its lending operations and profitability going forward, which will result in an improvement in the value, it said.

It can be noted that the Reserve Bank has repeatedly sounded caution about the lending against gold business due to concentration risk, and imposed several restrictions which impacted the growth of the companies in the sector. A majority of those have been rolled back gradually.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Bureaucrats have enjoyed flying miles at taxpayer expense for too long

    The beleaguered Indian taxpayer will certainly applaud prime minister Narendra Modi’s attempt to deliver on his promise of cutting down fiscal defic

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Varun Dutt

<b>Riskfactor</b>: CHAIN REACTION

A domino effect is the cumulative effect produced when one ...

Zehra Naqvi

Rememberance and forgetting are crucial

Memories are so vital to our lives that they can ...

Dharmendra Khandal

Sandalwood may get extinct if not protected

When we talk of sandalwood, the most common usage that ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture