CreditAccess Grameen To Buy Madura Micro Finance For Rs 876 Crore
A local woman signs a register to receive a loan, as a micro finance company employee looks on. (Photographer: Adeel Halim/Bloomberg)

CreditAccess Grameen To Buy Madura Micro Finance For Rs 876 Crore

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Microfinance institution CreditAccess Grameen Ltd. on Wednesday said it will acquire 100 percent stake in Chennai-based Madura Micro Finance Ltd. in a two-step process for Rs 876 crore.

In the first leg, Bengaluru-headquartered CreditAccess Grameen will acquire up to 76.2 percent stake in Madura Micro Finance from existing shareholders for Rs 666.4 crore in cash. In the second stage, Madura Mirco Finance will be merged into CreditAccess Grameen via a scheme of the arrangement.

"The acquisition strengthens our microfinance franchise, which can be leveraged to provide innovative financial services and products matching the evolving needs of underserved and unbanked households," CreditAccess Grameen's Chairman Paolo Brichetti said in a statement.

As part of the merger, the residual shareholders of Madura Micro Finance will receive shares of CreditAccess Grameen at the share swap ratio proposed in the scheme of arrangement.

"The acquisition represents an immense opportunity to build an even stronger operating platform and leverage innovations in technology, data and analytics for the benefit of low-income rural households," Tara Thiagarajan, chairman and managing director at Madura Micro Finance said. Thiagarajan will act as an adviser to the board of CreditAccess Grameen after the merger.

The business acquired from Madura Micro Finance will continue to operate as a separate division until the integration of business and processes are complete.

All employees of Madura Micro Finance will become employees of CreditAccess Grameen upon merger.

Madura Micro Finance is the 11th largest NBFC-MFI in India with gross loan portfolio of Rs 2,053 crore, 11.1 lakh borrowers and 430 branches as on Sept. 30, 2019.

The merger is subject to all regulatory approvals.

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