The finance sector is the most important sector for any economy. In India, Mahindra Finance is the most prominent non-banking finance company. The plan to move into the global market in the finance sector completed by taking a 58.2% stake in Srilanka Based Ideal Finance by investing 2 billion Sri Lankan Rupees. This investment opens the door to grow its financial services in the global market.
A mutual agreement happens between Mahindra finance and ideal finance in 2019, agreeing 58% stake in march 2021, and all the further process of agreement is completed till September 2021 by mutual consent. The main aim is to extend its finance business in Sri Lanka by investing in the ideal finance. Ideal finance is the best source by which the company will provide its services in Sri Lanka.
Ramesh Iyer, VC & MD, Mahindra Finance, said, "Ideal Finance is the most prominent financing company among Sri lankan consumers. This company works in many types of financial services like gold loans, business loans, consumer durable loans, personal loans, automobiles and farm equipment. Along these services additional financial services are also provided to their customers according to the requirements."
He also said, "Ideal finance companies offer a wide range of financial products like financial leases for automobiles and farm equipment, gold loans, business loans, durable consumer loans, personal loans and many more". Ramesh Iyer also said that there is no further planning to increase stake by 58.2% by the Mahindra Finance company, by this ideal finance move to other sectors than vehicle financing.
VG Ramakrishnan, managing director of Avanteum Advisors, said, "Sri Lanka is a similar country like India, Mahindra Finance took a smart decision by investing in a Sri Lanka finance company. This discussion is helpful in entering the market of Bangladesh, and Nepal."
Iyer repeated that Sri Lanka has a well-regulated and mature financial services market, constantly increasing over many years, preventing the pandemic years. "It is expected that When we overcome this pandemic, the market will grow and bounce back in a great way. Our Country is working to identify the opportunities in the neighbouring countries when they emerge,". He said on a company query looking beyond Sri Lanka for development in the coming years.
Ideal Finance will offer financial leasing for both Mahindra and non-Mahindra vehicles. The Sri Lankan market has many Tata Motors and Ashok Leyland players, Mahindra well entrenched in their market, especially in the commercial vehicle portfolio. Here, you get many tractor Models like Mahindra 575, Mahindra 475, Tata 407 truck and many more.
Iyer said on the returns from their overseas ventures, "The JV that we have with Rabo Bank subsidiary (DLL) in the USA, in which MMFSL keeps a 49 percent stake has posted an annual income of USD 61.9 Million and a PAT of USD 17.5 Million as of March 31, 2021 and we suppose this JV to continue to post robust numbers. With Ideal Finance, we are currently serving with our Sri Lankan partners to lay down the decisive roadmap for the firm for the next 3 – 5 years, with clearly marked financial and operational milestones' '.
In Sri Lanka, Ideal Finance Ltd. (IFL) is a non-banking financial institution working in the rural and semi-urban sectors. The Ideal Group has mainly worked with Mahindra's automotive industry over the years.
User :- Vishal Samadhiya