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Magma buys GE unit

Mumbai, Nov. 8: Magma Fincorp Ltd, the Calcutta-based non-banking finance company (NBFC), is acquiring the housing finance and home equity loan portfolios of GE Capital worth Rs 1,600 crore.

The acquisition will mark Magma’s entry into housing finance.

The sector is extremely competitive with commercial banks and housing finance companies now looking to entice new borrowers with attractive offers.

Magma is planning to largely target tier-II to tier-VI cities where it believes there is a strong growth potential with home loans of up to Rs 25 lakh per borrower.

Magma will be acquiring the entire equity capital of GE Money Housing Finance (GEMHF), which has housing finance loan assets worth Rs 660 crore.

It will also be acquiring the home equity loan portfolio (loans against property) of GE Money Financial Services Pvt Ltd, which has loan assets worth Rs 940 crore.

Sanjay Chamria, vice-chairman & managing director of Magma Fincorp, said the company would fund the acquisition through a mix of debt and equity.

The company had lines of credit with 20 commercial banks, he added.

Magma has a presence in various product categories, including commercial vehicle loans, passenger car loans, construction equipment finance and SME funding. Recently, it had forayed into general insurance.

While Magma has a network of 250 branches in 21 states with 80 per cent of the branches in rural and semi-urban markets, Chamria said the acquisition would fulfil its plans to enter the affordable and middle-income housing finance sector.

 
 
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