L&T Finance Holdings to buy Family Credit for Rs120 crore

L&T Finance Holdings Ltd, the financial services arm of engineering and construction major Larsen & Toubro Ltd, has agreed to acquire Family Credit Ltd, the India-based vehicle finance arm of France's Societe Generale Consumer Finance, for Rs120 crore ($22.36 million).

The acquisition will consolidate LTFH's presence in auto financing business in India, the release said. The transaction is subject to receipt of appropriate regulatory approvals and to customary closing conditions, it added.

As of 30 June 2012, Family Credit had loan book size of around Rs1,287 crore, of which two-wheeler financing constituted 53 per cent and car financing 35 per cent.

FCL has 53 branches across 16 states in India and presence in more than 1,400 dealer outlets with a sizeable customer base in excess of 400,000. It also has a fully staffed professional team with hands-on experience in the two wheeler financing and auto financing business, the release said.

FCL reported a net profit of about Rs5 crore and a net interest margin of 13.6 per cent for the quarter ended June 30, it said.

''FamilyCredit Ltd is a significant player in the two-wheeler financing segment. The company offers a well established platform with robust credit and risk management systems. The business synergises well with our existing retail financing business and provides opportunity for us to further expand our product offering in the consumer finance domain,'' Y M Deosthalee, chairman and managing director of LTFH, said.