JM Financial to Acquire Additional 49% Stake in JM Financial Credit Solutions

JM Financial Ltd, a BSE-listed company, is set to acquire an additional 48.96% stake in its subsidiary JM Financial Credit Solutions Ltd (JMFCSL) from INH Mauritius 1. This move is part of a reorganization within the group and will see JM Financial increase its stake in JMFCSL to 95.64% upon completion of the transaction.

In a separate deal, JM Financial will also sell its 71.79% stake in JM Financial Asset Reconstruction Company Ltd (JMFARC) to JMFCSL for Rs 856 crore. This transaction will allow JM Financial to consolidate its distressed credit business under its wholesale debt syndication platform.

Vishal Kampani, Non-Executive Vice Chairman of JM Financial, highlighted that the proposed transactions will provide greater flexibility in capital allocation and distribution of profits to shareholders. The company aims to leverage its talent pool to scale up its distribution and syndication businesses across asset classes.

JM Financial Credit Solutions Ltd, registered with the Reserve Bank of India as a non-banking finance company, focuses on mortgage lending and posted a revenue of Rs 1,305 crore in FY24. On the other hand, JMFARC, with assets under management of Rs 14,500 crore, recorded a net loss of Rs 942 crore in the same period.

These transactions are subject to regulatory approvals and the signing of definitive agreements. JM Financial’s strategic moves reflect its commitment to optimizing its business structure and capital allocation to capitalize on growth opportunities in the evolving market landscape.