Muthoot Finance announced that it has successfully completed the acquisition of Muthoot Insurance Brokers Pvt Limited (MIBPL) by transfer of equity shares from its existing shareholders for a consideration of Rs. 20 crores, making MIBPL a wholly owned subsidiary of Muthoot Finance.
Approval for the transfer of shares has been received from Reserve Bank Of India and Insurance Regulatory and Development Authority Of India subsequent to which the transaction is completed, the company said in the press release.
MIBPL is an unlisted private limited company holding a license to act as Direct Broker from IRDA since 2013. It is actively distributing both life and non-life insurance products of various insurance companies.
During FY15, it insured more than 2,92,000 lives with a premium collection of Rs. 35 crore under Traditional, Term and Health products. The same has increased to 4,59,000 lives with a premium collection of Rs. 49 crore in FY16.
Mr. George Alexander Muthoot, MD, Muthoot Finance Ltd said "By acquiring MIBPL as a wholly owned subsidiary of Muthoot Finance, we are further diversifying our bouquet of investment products for our customers as well as fee based income earning activities. We are expecting shareholders to benefit through this acquisition in future as the company has a large customer base."
Mr. Thomas P Rajan, Director , MIBPL stated "By becoming a wholly owned subsidiary of Muthoot Finance, we will be able to serve customers of Muthoot Finance as well as scale up our distribution activities across the nation."
The company provides personal and business loans secured by gold jewellery, or Gold Loans, primarily to individuals who possess gold jewellery but could not access formal credit within a reasonable time, or to whom credit may not be available at all, to meet unanticipated or other short-term liquidity requirements.
Shares of Muthoot Finance were seen trading at Rs 266, higher by 2.66 per cent on BSE at 3.11 pm IST. It touched an intra- day high of Rs 269 during the trade.