Facing growth headwinds following regulatory tightening, leading pure-play gold financier Muthoot FinanceBSE -0.73 % today announced branching out to neighbouring Sri Lanka by acquiring a 30 per cent stake in Asia Asset Finance for $2.1 million.
The south-India based company acquired 1,67,785,600 shares in the Sri Lankan financial service firm, which is listed on the Colombo Stock Exchange, from Asia Capital, a major shareholder in the company.
Asia Asset Finance, which has been in the lending business since the 1970s, is involved in retail finance and business loans, and operates from 11 branches in the island nation.
It can be noted that the Reserve Bank has repeatedly sounded caution about the lending against gold business due to concentration risk, and imposed several restrictions which impacted the growth of the companies in the sector. A majority of those have been rolled back gradually. (Economic Times)