MICROCAPITAL BRIEF: Manappuram of India Acquires Milestone Home Finance

Manappuram Finance Limited, an India-based non-banking finance company, recently signed an agreement to acquire Milestone Home Finance Company, an organization licensed to provide housing finance in India, from Jaypee Hotels, an India-based hospitality company, for an undisclosed amount. Manappuram offers financial services such as loans, money transfers and foreign-exchange services through a network of approximately 3,300 branches. With the acquisition, Manappuram will also offer housing loans. The move follows developments in the Indian housing finance segment such as the establishment of the National Housing Bank Residex (NHB Residex), a system that tracks residential property prices, and the federal government’s Credit Risk Guarantee Fund Trust for Low Income Housing, aims to facilitate access to credit for low-income households [1].

As of March 31, 2013, Manappuram reported total assets of INR 127 billion (USD 2.10 billion), return on assets (ROA) of 1.58 percent and return on equity (ROE) of 7.91 percent [2]. As of March 31, 2013, Milestone Home Finance Company reported total assets of INR 1.75 billion (USD 699 million) and income worth INR 358 million (USD 28.9 million). As of March 31, 2013, Jaypee Hotels reported total assets of INR 4,600 billion (USD 76 billion).

By Chikondano Faith Chisala, Research Associate

About Manappuram Finance Limited: Manappuram Finance Limited is an India-based non-banking financial company listed on the Bombay Stock Exchange. The company provides financial services including foreign exchange services, money transfers and loans against gold through 3,300 branches across India. Equity investors in the company include Mr V.P. Nandakumar, Sushama Nandakumar, Baring India Private Equity Fund III, Smallcap World Corporation, and Hudson Equity Holdings Limited.  As of March 31, 2013, Manappuram reported total assets of INR 127 billion (USD 2.10 billion), return on assets (ROA) of 1.58 percent and a return on equity (ROE) of 7.91 percent.

Sources and Additional Resources

[1] Government of India Press Information Bureau, Press Release, “Mortgage Risk Guarantee Fund Set up to Facilitate Economically Weaker Sections and Low Income Households in Getting Credit from Banks and Housing Finance Companies,” http://pib.nic.in/newsite/PrintRelease.aspx?relid=101967

[2] Manappuram Finance Limited Annual Reports, “Annual Report_12_13,” http://www.manappuram.com/php/annualReport.php

Business Standard, “Manappuram Finance steps into housing loan segment,” http://www.business-standard.com/article/companies/manappuram-steps-into-housing-finance-114031301293_1.html

Economic Times, “Manappuram Finance acquires Milestone Home Finance Company from Jaypee Hotels,” http://articles.economictimes.indiatimes.com/2014-03-13/news/48189405_1_jaypee-hotels-manappuram-finance-limited-icici-securities

MicroCapital, February 5, 2014, “European Bank for Reconstruction and Development (EBRD) Lends $14m to Societe Generale Banka Montenegro to Support On-Lending for Housing,”https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-lends-14m-to-societe-generale-banka-montenegro-to-support-on-lending-for-housing/

MicroCapital, November 20, 2013, “International Finance Corporation (IFC), Government of Canada to Loan $85m to Dewan Housing Finance of India for “Green” Mortgages,”
https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-government-of-canada-to-loan-85m-to-dewan-housing-finance-of-india-for-green-mortgages/

MicroCapital, April 29, 2010, “Sequoia Capital Sells Stake in Manappuram General Finance and Leasing Ltd of India for $70m,” https://www.microcapital.org/microcapital-brief-sequoia-capital-sells-stake-in-manappuram-general-finance-and-leasing-ltd-of-india-for-70m/

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Chikondano Faith joined MicroCapital after holding various rolse at a commercial bank, where she improved and diversified her skill set by exploring many banking functions including: trading, treasury management, credit analysis and business development. She developed an interest challenges faced by entrepreneurs in emerging economies after taking up a small business development and entrepreneurship course during her undergraduate studies at the University of Pretoria in Pretoria, South Africa. She holds also Masters degree in Strategic Management from the University of Derby, her independent study topic focused on strategies to support Small and Medium Enterprises (SMEs) in Malawi. In working with MicroCapital, she hopes to expand her knowledge of microfinance and to use this internship as a foundation to pursue a career in micro and developmental finance. Chikondano Faith enjoys travel, drawing, jazz music, and improving her French during her spare time.