Essel to buy BSS Microfin for Rs 90 cr

Industry:    2016-02-17

Subhash Chandra-promoted Essel group will buy Bengaluru-based BSS Microfinance Private Ltd (BMPL) in a Rs 90-crore deal. The MFI has 0.2 million clients and a loan book of Rs 378 crore at the end of September 2015. It predominantly operates in Maharashtra and Gujarat and has a net worth of Rs 60 crore. Amitabh Chaturvedi, Managing Director, Essel Finance, said the acquisition was part of plans to have a presence in four segments — small and medium size units funding, financing those at the bottom of the pyramid, housing finance and equipment finance. BSS Microfinance promoter Ramesh Bellamkonda holds 55 per cent stake. The balance is held by a trust. RBI-registered BSS Microfinance Private Limited took over the microfinance operations of Bharatha Swamukti Samsthe (BSST) from 2008. MFI is operating in Karnataka and Maharashtra. After bringing the company into Essel fold, the group plans to spread micro-finance business further in Maharashtra, enter Gujarat, Punjab and Harayana, Chaturvedi said adding present team at the helm would continue to manage operations after acquisition. According to Brickworks Ratings, BMPL’s (BBB rated) client base is made up of women borrowers. For FY15, the loan disbursement was Rs 332.58 crore and the year-end loan outstanding amount was Rs 327.35 crore. Karnataka alone contributed around 92 per cent of the total loan portfolio of Rs 378.31 crore outstanding as on September 30, 2015. Presently, BMPL is offering loans with size ranging from ‘5,000 to ‘30,000 for income generation activities, general purpose, life quality improvement, etc. with repayment periods ranging from 18 fortnights to 54 fortnights (little more than two years). The MFI reported net interest income (NII) of Rs 31.95 crore for FY15 against Rs 26.23 crore for FY14, a growth of 22 per cent. Its profit after tax declined from Rs 6.58 crores for FY14 to Rs 4.83 crore for FY15 because of the one-time reversal of administrative cost for providing insurance facilities

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