L&T Finance Limited (LTF) has taken a strategic step to expand its gold loan portfolio by acquiring the gold loan business of Paul Merchants Finance Private Limited. The deal, structured as a slump sale on a going concern basis, is valued at ₹537 crore, with adjustments expected until closure.
Key Highlights of the Acquisition
- Agreement Type: Business Transfer Agreement (BTA)
- Execution Date: February 7, 2025
- Transaction Value: ₹537 crore (subject to adjustments)
- Expected Closure: Q2 FY 2025-26
- Key Conditions: RBI approval, contractual consents
What the Acquisition Includes
As per the Business Transfer Agreement (BTA), LTF will take over:
- Assets and liabilities associated with the gold loan business
- Existing contracts with customers and vendors
- Employees engaged in gold loan operations
- Operational framework for seamless business continuity
Regulatory and Compliance Factors
The deal is subject to regulatory approvals, primarily from the Reserve Bank of India (RBI), along with required consents from contractual counterparties.
Additionally, the agreement includes non-compete and non-solicit clauses, ensuring that Paul Merchants Finance will not engage in similar business activities post-transaction.
Why This Acquisition Matters
L&T Finance has been actively expanding its presence in the gold loan segment, capitalizing on India’s growing demand for secured lending solutions. This acquisition is expected to:
✔ Strengthen LTF’s market position in the gold loan sector
✔ Expand its customer base and distribution network
✔ Enhance financial inclusion by providing easy access to credit
Final Thoughts
With a strong focus on retail lending, L&T Finance’s acquisition of Paul Merchants Finance’s gold loan business marks a significant step in its growth strategy. As the deal progresses toward closure in FY 2025-26, it positions LTF to further solidify its standing in the gold loan market.
Stay tuned for more updates on this evolving financial transaction!
