The board of JM Financial Ltd. on Saturday approved the acquisition of 42.99% stake in JM Financial Credit Solutions Ltd. (JMFCSL) by JM Financial Ltd (JMFL) for about ₹1,282 crore.
Post the transaction, the stake held by JMFL in JMFCSL will increase from 46.68% to 89.67%. The Board has also approved the acquisition of 71.79% stake in JM Financial Asset Reconstruction Company Ltd. (JMFARC) by JMFCSL from JMFL for about ₹856 crore.
Post this transaction the stake held by JMFCSL in JMFARC will increase from 9.98% to 81.77%, the company said in a regulatory filing.
“The proposed transaction shall result in a net cash outflow of approximately ₹426 crore from JMFL and shall be funded from surplus cash,” it said. The transaction is expected to be completed in 3-6 months.
Vishal Kampani, Non–Executive Vice Chairman, JMFL in a statement said, “The proposed transaction shall align our corporate and capital structure offering greater flexibility to optimise capital allocation and distribution of profits to our shareholders.”
“We foresee significant long term growth opportunities emerging for our businesses and are well positioned to leverage them in the evolving market scenario,” he added.