Hinduja group’s flagship company Ashok Leyland Ltd is acquiring a 4.68% stake in its commercial vehicle financing subsidiary Hinduja Leyland Finance Ltd (HLF) from private equity firm Everstone Group, the company said in a stock exchange filing on Thursday.
Ashok Leyland will pay Rs225.42 crore to acquire the stake from Everstone Group’s Everfin Holdings, which currently owns a 14.05% stake in the company.
“The company has entered into a share purchase and shareholders agreement with Everfin Holdings, shareholder of Hinduja Leyland Finance Ltd, for acquisition of 2,04,92,676 shares of Rs10/- each constituting 4.68% in the paid-up share capital of Hinduja Leyland Finance at a price of Rs110/- per share,” the company said in the filing.
Consequent to the share purchase, Ashok Leyland’s shareholding in HLF will increase from 57.22% to 61.90%, according to the filing.
HLF was founded in 2008 as a non-banking financial company. It provides customized finance for utility vehicles, tractors, cars and two-wheelers among other vehicles, focusing on the semi-urban and rural sectors.
In July 2013, Everstone had invested Rs200 crore in HLF.
Hinduja Leyland Finance recorded revenue of Rs1,486.31 crore in financial year 2016-17, compared with Rs1,145.69 crore in the previous year. In 2016-17, the company reported a profit of Rs167.53 crore, as against Rs150 crore in the previous year.
Everstone had earlier planned to divest almost 50% of its stake in Hinduja Leyland Finance through the company’s planned initial public offering (IPO).
In March 2016, HLF had filed its so-called draft red herring prospectus for its IPO with markets regulator Securities and Exchange Board of India.
However, the IPO was later deferred, Mint reported in July.
On Thursday, shares of Ashok Leyland closed at 114.25 per share on the BSE, up 0.75%, while the benchmark index Sensex closed at 33,106.82 points, up 1.06%.
Source: Mint