Choice Finserv Private Limited, a material subsidiary of Choice International Limited, has recently announced two major acquisitions aimed at expanding its presence in the retail lending business. The acquisition of Paisabuddy Finance Private Limited and Sureworth Financial Services Private Limited will see Choice Finserv acquiring the retail lending businesses of both firms through a slump sale on a going concern basis. This move is a strategic step to increase Choice Finserv's assets under management (AUM), a key focus for the company.

Expanding Retail Lending: A Strategic Move

In October 2024, Choice Finserv announced that it would acquire the retail lending business of Paisabuddy Finance and Sureworth Financial Services. This decision was taken in line with the company's commitment to expanding its reach in MSME lending and exploring new segments like green finance. These acquisitions are expected to significantly enhance the company’s AUM, providing a solid foundation for further growth.

Paisabuddy Finance Acquisition Details

The Paisabuddy Finance business, based in Rajasthan, Gujarat, and Madhya Pradesh, has a turnover of Rs. 47.45 crore as of March 2024. It brings a portfolio of Rs. 276.20 crore in assets under management (AUM) to Choice Finserv. The acquisition will help Choice Finserv expand its retail loan segments, which are crucial for the company’s growth strategy. Notably, Choice Finserv did not acquire any shares of Paisabuddy, only its retail lending business, further aligning with its objective of strengthening its market position without taking ownership of the entire company.

Sureworth Financial Services Acquisition

In a similar vein, Choice Finserv has also acquired the retail lending business of Sureworth Financial Services, a company specializing in MSME loans and affordable housing loans. Sureworth’s turnover for FY 2023-24 stands at Rs. 4.29 crore, and it brings in an AUM of Rs. 68.79 crore. This acquisition also aligns with Choice Finserv’s expansion plans, particularly in green finance initiatives. Sureworth’s operations across Rajasthan and Madhya Pradesh will help Choice Finserv reach underserved markets and further boost its business.

Strategic Goals and Future Plans

The acquisitions are not just about expanding the AUM. Choice Finserv is also focused on green finance, a growing segment in the financial services industry. The company plans to fund rooftop solar projects and electric vehicles through these newly acquired businesses, making a meaningful contribution to sustainable finance in India.

Financials and Consideration

The total consideration for the Paisabuddy acquisition stands at Rs. 165.19 crore, paid partly in cash and partly in shares. For the Sureworth acquisition, the deal is valued at Rs. 5.99 crore, also paid partly in cash and partly in shares. Both acquisitions are expected to close by December 31, 2024.

In both cases, Choice Finserv has not acquired any shares in Paisabuddy or Sureworth; it has only acquired their respective retail lending businesses. This strategic move will enhance Choice Finserv's position in the market and further its objective of becoming a leader in sustainable finance.

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