In a move that further consolidates its operational control and strengthens group-level synergy, JM Financial Limited, a prominent player in India's financial services sector, has announced a strategic acquisition that will result in 100% ownership of JM Financial Credit Solutions Limited (JMFCSL). On June 27, 2025, JM Financial entered into a Share Purchase Agreement (SPA) with Moraine Master Fund LP (MMF) to purchase the remaining 2.98% equity stake in its material subsidiary, JMFCSL. The deal is valued at approximately Rs 88.97 crore and is a cash consideration transaction.

This acquisition marks a significant milestone for JM Financial as it moves from 97.02% ownership to complete control of its key lending arm, transforming JMFCSL into a wholly owned subsidiary. This strategic step reflects the company's intent to deepen its hold over its core businesses, especially within the Non-Banking Financial Company (NBFC) space.

Deal Structure and Terms

The agreement between JM Financial and Moraine Master Fund LP was executed on June 27, 2025, and involves the acquisition of 84,343 equity shares representing 2.98% of JMFCSL’s equity capital. The transaction will be completed within 30 days from the date of execution or such mutually agreed extended period, ensuring a smooth transfer of ownership.

This is a related party transaction as per SEBI norms, since JMFCSL is already a material subsidiary of JM Financial. However, the company has clarified that neither the promoters nor the promoter group has any interest in the entity from which the shares are being acquired.

The acquisition is being done at arm’s length and follows the required disclosure protocol laid out under SEBI Master Circular no. SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024. JM Financial has ensured that all regulatory requirements and transparency obligations have been met during the process.

Strategic Rationale Behind the Acquisition

JM Financial’s decision to acquire the remaining stake in JMFCSL is strategic and financially sound. With this acquisition, JM Financial aims to:

• Enhance its share of consolidated profits

• Achieve greater control over capital allocation decisions within JMFCSL

• Streamline operations, financial reporting, and profit distribution mechanisms

The financial arm, JMFCSL, plays a pivotal role in JM Financial's lending operations, especially in structured finance, real estate lending, and high-value credit services. Complete ownership enables JM Financial to integrate decision-making processes more tightly and leverage JMFCSL’s balance sheet more effectively.

About JM Financial Credit Solutions Limited (JMFCSL)

JMFCSL is a Systemically Important Non-Deposit taking NBFC, classified under the Middle Layer (NBFC-ML) as per the Reserve Bank of India’s Scale Based Regulations. It has been operational since its incorporation on May 15, 1980, and is one of the most crucial verticals within the JM Financial Group.

The company operates exclusively in India and has built a strong lending book through its specialised credit offerings. Over the past three years, JMFCSL has demonstrated consistent financial performance:

• FY 2024-25: Turnover of Rs 826.23 crore

• FY 2023-24: Turnover of Rs 1,304.82 crore

• FY 2022-23: Turnover of Rs 1,172.54 crore

While the FY25 turnover saw a decline, the acquisition reinforces JM Financial’s confidence in JMFCSL’s long-term growth potential and its importance in the group’s lending strategy.

Financial and Operational Benefits

This acquisition brings with it a multitude of financial advantages and operational synergies for JM Financial:

1. Full Ownership Means Streamlined Governance
   With complete control, JM Financial can now exercise unified governance and strategic alignment, which is crucial for high-growth segments like credit and lending.

2. Consolidation of Earnings
   JM Financial will now record 100% of JMFCSL’s profits in its consolidated statements, enhancing earnings per share (EPS) and shareholder value.

3. Capital Efficiency and Profit Distribution
   The full ownership structure allows JM Financial to manage internal capital flows and optimise dividend payouts, improving liquidity and internal reinvestment capability.

4. Operational Integration
   Strategic decisions such as digital transformation, customer segmentation, risk profiling, and cross-selling can now be executed more cohesively across the group entities.

Sectoral Context and Market Significance

The NBFC sector in India has witnessed considerable regulatory tightening in recent years, especially under the RBI’s scale-based regulation framework. Having a fully owned lending subsidiary enables JM Financial to maintain stricter compliance, risk controls, and regulatory alignment. Additionally, this transaction enhances the company's competitive positioning in the NBFC space by consolidating assets, liabilities, and strategic oversight.

JM Financial’s acquisition comes at a time when financial services firms are focusing on portfolio optimisation, improving operational leverage, and unlocking group-level synergies through internal restructurings. This aligns with industry-wide trends of consolidation and capital efficiency, which are vital to long-term growth and sustainability.

Conclusion

The Rs 88.97 crore share acquisition by JM Financial Limited to attain 100% ownership of JM Financial Credit Solutions Limited signifies a powerful step towards strengthening its core NBFC business and achieving operational excellence. This transaction is expected to enhance profitability, improve strategic agility, and lead to better financial consolidation within the group.

By taking full control of JMFCSL, JM Financial is positioning itself for sustained growth in the lending space, while also reinforcing its commitment to building robust and self-sufficient subsidiaries. The move not only strengthens the company’s market reputation but also sets a precedent for efficient capital allocation and internal corporate governance.

This acquisition will be closely watched by stakeholders, analysts, and market participants, as JM Financial navigates the next phase of its corporate evolution with a sharper focus, increased control, and a clear roadmap for long-term value creation.

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