Inditrade Capital is all set to sell its equity broking business to Choice InternationalNSE 0.00 %, a Mumbai-based financial services firm, two people familiar with the development said.
The deal value is pegged at Rs 32 crore. The deal is likely to be announced Friday.
People in the know said that Inditrade is exiting equity broking, which was its bread and butter initially, as the company now plans to focus solely on lending to small and unbanked customers. The group is eying four-to-five-fold growth in its agri-commodity financing and microfinance businesses in FY19, while it also plans to venture into the affordable housing finance segment.
Choice International, a non-banking finance company, has different business interests including equity broking, commodity broking, financial advisory and mutual fund distribution. It has a wholly owned equity broking subsidiary called Choice Equity Broking.
“It’s proposed to be a slump sale,” a person cited above said. This means Choice International will acquire Inditrade Capital’s 1.2 lakh customers across 27 branches and its 320 employees. About 40% of its business comes from Kerala.
Inditrade group chairman Sudip Bandyopadhyay refused to comment on the deal. E-mails sent to Choice International seeking details remained unanswered until the publication of this report.
Inditrade’s share price on Thursday closed 1.96% lower at Rs 60 on BSE. Choice International’s shares gained 1.06% to Rs 137.80 on BSE.
Besides ramping up agri-financing and microfinance businesses, Inditrade group is also ready to provide merchant cash advances (MCA) to small traders and shopkeepers. It will begin this lending vertical in Mumbai before expanding in cities such as Hyderabad, Pune, Chennai and Kochi in the course of the year.
The company is actively looking at both organic and inorganic options to grow rapidly. The group is planning to raise about Rs 200 crore in combination of equity and debt in the second half of FY19 for financing growth of its different business units. The firm provides agri-commodity finances through its 57% subsidiary JRG Fincorp, while Inditrade Microfinance is a wholly owned unit.
Source: Economic Times