A person with knowledge of the matter said the price of the deal was not immediately known, but the acquisition would be an all-cash deal. The deal is likely to be signed soon, probably in a day or two, the source said.
According to sources, Centrum Housing Finance will take over the operations of NatTrust which will include branches, loan portfolio, employees and assets.
The acquirer had a portfolio of Rs 700 crore as of September, while Natrust had a portfolio of Rs 300 crore. This acquisition will give Centrum Housing a stronger foothold in the southern states where it currently has less presence. Natrust, a 25-year-old company, is present in 17 locations across four states in South India.
“Natrust promoters wanted to exit the lending business as they have other interests and it has become difficult for smaller companies to raise capital in the post-Covid market. Maintaining adequate liquidity was also a challenge for them,” said a person tracking the sector.
Neither Nattrust nor Centrum Housing responded to ET’s mail seeking comment on the matter.
reserve Bank of India (reserve Bank of India) tightened business norms for housing finance companies with assets of more than Rs 100 crore in 2021. “This will give a boost to M&A activities in the region,” said another person.
On the other hand, for Centrum Housing, which received an equity investment of Rs 200 crore from Morgan Stanley PE Asia in February 2020, it has become imperative to “leverage capital and grow”.
The mortgage lender started operations in 2017 and offers home loans through a network of 70 branches across 10 states in India – mainly in the North and West.
If this acquisition goes through, it will be the fourth acquisition of the Centrum Group in the last five years. Previous acquisitions during this period include FirstRand Bank India’s microfinance business, L&T Finance’s supply chain finance business and Altura Financial Services.
Apart from housing finance, Centrum Group has a wealth advisory business with an AUM of over Rs 35,000 crore. It also provides investment banking, stock broking and asset management services. Centrum recently forayed into banking with the launch of Unity Small Finance Bank.