Mumbai: Private sector lender IDFC Bank on Tuesday announced that it will acquire Tamil Nadu-based microfinance institution (MFI) Grama Vidiyal for an undisclosed amount in a move aimed at helping it widen its reach.
Soon after the bank declared the acquisition of the Tamil Nadu-based micro finance company, its shares jumped over 8 percent on the Bombay Stock Exchange (BSE).
The acquisition offers the bank access to 1.2 million households apart from adding 319 points of presence in seven states -- Tamil Nadu, Kerala, Karnataka, Puducherry, Maharashtra, Gujarat and Madhya Pradesh.
The bank said the three-decade old Trichy-based Grama Vidiyal will be its wholly-owned subsidiary and will act as a dedicated business correspondent of IDFC Bank.
Grama Vidiyal's had Rs 1,502 crore worth of micro finance assets under management as of March, and employs over 3,000 people. All loan assets on the book will be transferred to IDFC Bank.
"The acquisition of a micro-finance institution by a bank is an industry first," said Rajiv Lall, founder MD and CEO of IDFC Bank.
Grama Vidiyal Chairman S Devaraj said the deal is to achieve a common objective of transforming the lives and advancing livelihoods in rural areas and underserved segments.
(With PTI inputs)
