publicly listed Inditrade CapitalThe parent company of Inditrade Microfinance announced this in a regulatory filing to the stock exchanges.
“The company has received a notification Inditrade Microfinance Limited (IMFL), a debt listed company and a material subsidiary of the Company, informed that the Board of Directors of IMFL in its meeting held today (October 7) has, inter alia, approved the scheme of amalgamation of Is. Jankalyan Financial Services Private Limited with Inditrade Microfinance Limited with effect from July 1, 2022,” it said.
Inditrade Capital directly holds 70.5% stake in the microfinance arm, while the group holds close to 90% in the firm.
Sources close to the development said Jankalyan Managing Director Alok Biswas will head the merged entity, which will be renamed Inditrade Jankalyan Microfinance,
At present, Inditrade Microfinance has a loan book of around Rs 350 crore, while Jankalyan has an outstanding portfolio of Rs 135 crore. This means that the merged entity will start with a portfolio of Rs 500 crore and around four lakh borrowers.
The captains of the microfinance sector have welcomed the move. “This is good news. Consolidation is good for the sector,” said the chief executive officer of a small finance bank.
Another industry stalwart said, “This is positive for both the merging partners. Smaller MFIs like them are facing serious challenges post COVID-19 related stress.” “The merged entity will also benefit from geographic synergies.”
Three-fourth of Inditrade Microfinance’s outstanding loans come from the three states of Karnataka, Kerala and Tamil Nadu, It is also present in Bihar, Gujarat, Madhya Pradesh, Maharashtra and Odisha. On the other hand, public welfare is mostly present in the eastern states – Assam, Bihar, Jharkhand, Odisha, Tripura and West Bengal.