Indian private lender ICICI to invest into Midland Microfin
By Vinu Lal
11:00, 1 October 2021
Indian private bank ICICI Bank has entered into an agreement to acquire 4.5 million shares in the non-banking financial company (NBFC) Midland Microfin for about INR524.2m ($7.07m) in cash, the lender said in a stock exchange notice on Friday.
The lender would be acquiring the stake at a share premium of INR106.27 a share. After the investment, ICICI Bank would hold 7.3% of the total share capital of Midland, according to the notice.
Midland Microfin allotted the shares to ICICI Bank on 30 September. Since the shareholding acquired by ICICI is below 10%, regulatory approval is not required, it added.
Midland's financials
The non-deposit taking NBFC was incorporated on 27 May 1988. For the financial year 2020-21, the company posted a net profit of INR146.3m.
The firm has posted a turnover of INR1.92bn for the same year, a 6.6% rise from INR1.8bn recorded the previous year. For the financial year 2018-19, the company had posted a turnover of INR1.16bn.
"ICICI Bank, its subsidiaries and its associates in the normal course of business may have business dealings with Midland at an arm’s length," said the exchange note.
Aviator investment
In May 2020, Mauritius-based Aviator Emerging Market Fund invested $3.1m in Punjab-based Midland Microfin, a firm that provides funds for financial and social empowerment of women. The NBFC provides funds by way of business loans, according to a report in livemint.com.
Aviator Emerging Market fund invested in Midland Microfin through a combination of non-convertible debentures and external commercial borrowings.
Shares of ICICI Bank closed 1.21% lower at INR692.35 by the close of Friday’s session on the National Stock Exchange.
ICICI Bank, termed as the second-largest private sector bank in India in terms of assets, by stock analyst Geojit Securities, saw its net interest income climb up 17.8% year-on-year for the first quarter of the financial year 2021-22.
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