Ideal Fin. aims for ‘exponential’ growth post-Mahindra acquisition
- Expects asset growth to Rs. 5.5 b
- Mahindra’s stake at Ideal Fin. grows to 58.2%
By Imsha Iqbal
Ideal Finance Ltd. (IFL) became a subsidiary of Mahindra & Mahindra Financial Services Ltd. (MMFSL) last Thursday (8) and expects an exponential growth through Mahindra & Mahindra along with Ideal Finance, The Morning Business learns.
Speaking to us, Ideal Finance and Ideal Motors (Pvt.) Ltd. Chairman Nalin J. Welgama stated: “With their (MMFSL) entry into Sri Lanka, we can expect exponential growth for Mahindra Ideal Finance,” implying that the shift of the ownership by the Mahindra is anticipated to make Ideal Finance go forward in the industry.
Expressing the outlook for the coming Financial Year (FY), the Ideal Finance Chairman said: “We are working on a three year plan to grow from assets of Rs. 5.5 billion in order to be the most admired finance companies in Sri Lanka.”
Mahindra Financial Services acquired 20% of equity from the existing shareholders of Ideal Finance last week, owning a total of 58.2% of Ideal Finance.
Speaking about Ideal Motors, Welgama said: “Ideal Motors has been representing Mahindra & Mahindra since 2009,” highlighting that initial partnering with Mahindra took place in 2009.
On a later occasion in 2018, Ideal Motors partnered with Mahindra with an agreement on setting up Sri Lanka’s first recognised auto assembly plant, a project that was approved by the Board if Investment (BOI). At the same time, the establishment of Mahindra Ideal Lanka (Pvt.) Ltd. strengthened the partnership between the aforementioned companies.
When it comes to equity acquisition, this partnership further strengthened MMFSL entering Sri Lanka. At that moment, Mahindra acquired 38.2% of equity of Ideal Finance, in August 2019, in terms of a direct investment worth of Rs. 2 billion.
Accordingly, Ideal Finance is to be the second company that becomes a subsidiary of Mahindra USA, following the LLC.
Further adding on to Ideal Finance becoming the subsidiary, the Chairman of Ideal Finance said: “Partnering with a world renowned company as MMFSL, with no doubt, Ideal Finance will be a major breakthrough for Ideal Group in terms of world wide recognition, good governance, transparency as well as compliance,” saying that this equity acquisition is a step forward in making the company recognition and establishment in the world of finance.
He further said that Mahindra Financial Services is a leading finance company that has been established in India with the expertise since January 1991. It controls $ 11 billion of assets at this point of the company.
Mahindra is a federation of companies and the Group not only has business in automotive and vehicle and equipment finance but also aerospace, real estate, and infrastructure, agri industry, clean energy etc.
Ideal Finance is a financial institution that commenced in March 2012 that has been registered under Finance Business Act no.42 of 2011. The company was, in fact, formed by two experts in their respective fields of work; Ideal Motors (Pvt.) Ltd., the sole authorised dealer of Mahindra products in Sri Lanka, and Nishiya Mokkou Company Ltd., a material supplier in the footwear industry in Japan.