Mumbai: The Kolkata-based NBFC Magma Fincorp Thursday entered the housing finance space by acquiring the mortgage business of two GE Capital India arms for Rs 1,600 crore in an all-cash deal.
While the deal marks the exit of GE Capital's two decades of home loan business in the country, it also marks the entry of Magma into the domain.
GE Capital India's, a subsidiary of the GE Corporation of the US, operates under GE Capital Services India, GE Money Financial Services, GE Money Housing Finance, and GE Capital Strategic Investments.
However, the deal with Magma Fincorp involves just two of these--GE Money Housing Finance and GE Money Financial Services, which together have a combined asset portfolio of Rs 1,600 crore.
"We have acquired the entire portfolio of GE Capital India's mortgage business (the above said) for Rs 1,600 crore. These companies have a combined loan portfolio of Rs 1,600 crore," Magma Fincorp vice-chairman and managing director Sanjay Chamria told reporters here.
The transaction includes acquisition of 100 percent equity share capital of GE Money Housing Finance, which has an asset book of Rs 660 crore and 100 percent of the home equity loans portfolio of GE Money Financial Services with a loan book of Rs 940 crore as of May 31.
In a separate press statement, GE Capital India said the shareholders of GE Money Housing Finance agreed to sell their entire shareholding and the board GE Money Financial Services agreed to sell their entire home loan and home equity portfolio to Magma FinCorp and its affiliates in an all-cash deal, marking GE Capital's exit from the mortgage loan business in the country.
"This decision is in line with the strategic realignment of our businesses globally. It is also in line with a decision we had taken three years ago to exit from our mortgage loan business here. We will continue to focus on growing our commercial finance business and credit card joint venture with SBI, said GE Capital India president & chief executive Anish Shah said in a statement issued from New Delhi.
First Published: Thursday, November 08, 2012, 22:19