Mumbai, India – Tata Capital, a prominent non-banking financial company (NBFC) under the Tata Group, announced on Monday that its Board of Directors has given the green light for the acquisition of a significant stake in Yogakshemam Loans Ltd (Yogloans).
The agreement entails Tata Capital acquiring approximately 88.6% of the issued and paid-up share capital of Yogloans on a fully diluted basis. This will be achieved through a combination of purchasing existing equity shares from current sellers and subscribing to new equity shares of the target company. The transaction remains subject to customary closing conditions, including the receipt of all necessary regulatory approvals.
Strategic Expansion into Gold Loans
The acquisition marks a strategic expansion for Tata Capital into the burgeoning gold loan market. Yogakshemam Loans Ltd, an RBI-registered NBFC, specializes in providing financial services primarily focused on gold loans and financing solutions for micro and small businesses.
Upon the successful completion of the transaction, Yogloans will officially become a subsidiary of Tata Capital. This move is expected to enhance Tata Capital's diversified financial product offerings and strengthen its presence, particularly in South India where Yogloans operates extensively.
About Yogakshemam Loans Ltd
Yogakshemam Kuries & Loans was established in 1991 in Anthikad, Kerala, initially serving as a community-focused financial services provider. The company secured its Non-Banking Financial Company (NBFC) registration with the Reserve Bank of India in 2000, solidifying its regulatory standing.
In 2012, the company underwent a rebranding to become Yogakshemam Loans Ltd, signaling its specialized focus on gold loans. Currently, Yogloans boasts a network of over 160 branches spread across South India, catering to a broad base of retail and small-business customers.
Market Reaction to the Announcement
Following the announcement, Tata Capital shares experienced a relatively flat trading session in early deals on the stock market. The stock was recorded at Rs 357.55, reflecting a marginal decrease of 0.80% compared to its previous close of Rs 360.45. The market capitalization of the NBFC also saw a slight dip to Rs 1.51 lakh crore. Despite the immediate muted reaction, Tata Capital's stock has generally been in an uptrend, trading above various simple moving averages.