Piramal Enterprises Ltd, the financial services arm of the Piramal Group, on Wednesday (January 24) said its wholly-owned subsidiary Piramal Alternatives Trust (PAT) has entered into an agreement to acquire a 10.39% stake in Annapurna Finance Private Ltd (AFPL) for ₹300 crore.
"...we wish to inform you that Piramal Alternatives Trust, a wholly-owned subsidiary of the company, in line with its investment objective and strategy, has entered into an agreement today i.e. January 24, 2024, as a part of its normal course of business, to acquire 10.39% stake in Annapurna Finance Private Limited for a cash consideration of ₹300 crores by way of a purchase of equity shares and subscription to optionally convertible debentures amounting to ₹300 crore," according to a stock exchange filing.
The transaction, encompassing the purchase of equity shares and subscription to optionally convertible debentures, is contingent upon the receipt of regulatory approval by Piramal Alternatives Trust and is anticipated to be finalised before March 31, 2024.
AFPL, established in 2009 and headquartered in Odisha, stands as a prominent non-banking financial company-micro finance institution (NBFC-MFI) and ranks among the top 10 MFIs in India.
With an asset under management (AUM) of ₹9,233 crore as of September 2023, AFPL operates through over 1275 branches, serving a vast customer base exceeding 2.5 million across 20 states.
The company's diversified product offerings range from microfinance, constituting 86% of AUM, to secured and unsecured loans catering to medium and small enterprises (14% of AUM).
AFPL's AUM has surged at a compound annual growth rate of 29% over the past three years, reaching ₹1,570 crore in FY23, a substantial leap from ₹4,000 crore in FY20.
Importantly, the transaction is not classified as a related party transaction, and neither the promoter, promoter group nor group companies hold any interest in the entity being acquired.
