Mumbai-based financial services company IIFL Finance has entered into a joint venture with Open Financial Technologies Private Limited (OFTPL) to make inroads into the world of neo-banking.
Through this JV, both the companies aim to offer neo-banking services to consumers, micro enterprises and retail customers. They also plan to offer services like wealth management, lending and investment to certain groups.
Post incorporation of the new entity, IIFL Finance will hold 51 per cent stake whereas OFTPL will have 49 per cent stake. The wholly owned subsidiary company once incorporated will be related party of IIFL Finance.
IIFL’s recent exchange filing states, “Post incorporation, IIFL Finance and OFTPL will infuse additional capital such that the total capital of the company would be mutually agreed that the stake of IIFL Finance and OFTPL would be 51:49 respectively.”
IIFL Finance has brought 50, 00,000 equity shares of the company at Rs 10/-each, amounting to Rs 5 crore. After additional infusion by both the entities, seven directors will be appointed on the board of the newly incorporated company.
Three of these directors will be nominated by IIFL Finance whereas the other three by OFTPL. These directors will then go onto appoint an Independent Director on the Board.
As per this JV, IIFL Finance will have the exclusive rights for lending to merchants on-boarded by the newly incorporated company whereas OFTPL would not enter into a similar tech agreement with any other non-banking financial company (NBFC).
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