PE-backed Manappuram acquires Jaypee Hotels NBFC
Manappuram Finance, a listed non-bank financial company (NBFC) backed by Baring Private Equity India and India Equity Partners (IEP) among others, is to acquire Milestone Home Finance Company - a unit of Jaypee Hotels - for an undisclosed amount.
Founded in 2010, Mumbai-based Milestone holds a license to provide home finance. Jaypee Hotels operates six properties spread across New Delhi, Uttar Pradesh, and Uttarakhand and is part of the Jaypee Group, which has a presence in the construction, power, cement, real estate, hospitality and education sectors.
The acquisition is part of Manappuram's plans to diversify its business by entering India's INR 8.2 trillion ($133 billion) housing finance industry, a segment which - according to a release - is currently growing at a CAGR of 19%.
Set up in 1992, Kerala-headquarteed Manappuram claims to be one of India's leading gold loans NBFCs. It has 3,293 branches across 22 states and four union territories with assets under management (AUM) of INR80 billion as of December 31, 2013. The company went public in 1995.
IEP invested around INR500 million in Manappuram through two financing rounds in 2007 and 2008, acquiring a total equity stake of 8.54%. It later sold a 2.13% stake in January last year.
Meanwhile, Baring first acquired a 1.4% stake in Manappuram in 2011 and then returned with Sequoia and Siguler Guff to invest around INR1.45 billion in the company in 2012 for a 4.75% stake. Baring eventually increased its stake to 11.56% over four transactions between 2012 and 2013.
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