Aditya Birla Capital Joins Fray For Bharat Financial

Aditya Birla Capital Ltd. is in talks to acquire one of India’s biggest microfinance company Bharat Financial Inclusion, joining the fray with at least two other suitors, a person familiar with the development told BloombergQuint requesting anonymity.

Private sector lender IndusInd Bank Ltd. is also in talks with Bharat Financial, it told exchanges in March, while CNBC TV18 had reported in February that RBL Ltd. too was vying for the micro lender, formerly called SKS Microfinance. RBL had called the news report speculative in its reply to exchanges.

The Kumar Mangalam Birla-promoted company has entered negotiations even as it prepares to list after a restructuring at the parent Aditya Birla Group. On July 20, the company will be demerged from Grasim Industries Ltd., which will combine with the group flagship Aditya Birla Nuvo Ltd. The financial services company plans to go public next month.

Bharat Financial Inclusion has “been exploring various options from time to time and will make an announcement in accordance with the relevant regulations as and when a transaction, if any, is approved by the board,” a company spokesperson said in response to an emailed query by BloombergQuint. A spokesperson from the Aditya Birla Group said the reports are “untrue. We deny it”.

The talks are at a preliminary level and there is no guarantee the deal with fructify, the anonymous person quoted said.

Bharat Financial’s High Higher Valuations

A financial services company, Aditya Birla Capital also offers insurance and asset management services. On the lending side it’s book is dominated by the wholesale business. The acquisition may help it diversify into retail lending.

Bharat Financial is trading at four times its book value, at a premium to its peers like Ujjivan Financial Services and Equitas Holding Ltd. That maybe one reason why the beleagured micro lender has not yet been able to find a buyer.

News Source Yahoo Finance

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