On Tuesday, Mahindra & Mahindra Financial Services announced that it went into a joint venture with Sri Lanka based Ideal Finance. Mahindra & Mahindra Financial Services acquired to 58.2% stakes in Ideal Finance for Rs 80 crore. The company stated that it is going to invest Rs 80 crore until March 2021 in Ideal Finance.
Ideal Finance is a semi-urban and rural-based NBFC (Non-Banking Financial Company). The joint venture of the company with 25-year-old and well experienced in the financial sector, Mahindra Finance will help Ideal Finance to build a market-leading financial services business in Sri Lanka.
Mahindra Finance, in its statement, said “The strategic investment in Ideal Finance is a significant step in Mahindra Finance’s global expansion strategy. The company has been looking at expanding its market overseas as part of its global growth strategy. Sri Lanka, with its cultural and geographical similarity to India and its vibrant financial services market, emerged as the first choice.”
Mahindra Finance said that it had fuelled the entrepreneurial aspirations of over 6 million people in around 3,70,000 villages in India. It also claimed that with the joint venture with Ideal Finance, Mahindra finance would replicate its business model in Sri Lanka as well.
Mahindra Finance claims to manage AUM (Assets Under Management) worth $10 billion. Whereas, Ideal Finance established in 2012 has an asset base worth LKR 4.4 billion and an equity base of LKR 1.1 billion. The company is spread across Sri Lanka and has around ten branches. It caters to automobile loans, personal loans, and gold loans.
Vice-Chairman and Managing Director of Mahindra Finance, Ramesh Iyer said “We believe that the Sri Lankan market holds great potential for growth. We see a strong, long-term growth opportunity in this market and are committed to bringing in the required capital and expertise to fuel this growth.”
Chairman of Ideal Finance, Nalin Welgama said, “Ideal Finance shall be elevated to a tier-1 category with this partnership in a short span of time.”