IIFL Finance teams up with OFTPL to make inroads
IIFL Finance, a Mumbai-based financial services firm, has formed a joint venture with Open Financial Technologies Private Limited (OFTPL) to enter the neo-banking space.
Both organisations hope to offer neo-banking services to individuals, small businesses, and retail clients through this joint venture. They also intend to provide wealth management, financing, and investment services to specific groups.
IIFL Finance will own 51 percent of the new business after its formation, while OFTPL would own 49 percent. Once incorporated, the totally owned subsidiary firm will be a linked party of IIFL Finance.
“Post incorporation, IIFL Finance and OFTPL will infuse additional capital such that the total capital of the firm will be mutually agreed that the stake of IIFL Finance and OFTPL would be 51:49 respectively,” according to a recent exchange filing by IIFL.
IIFL Finance has purchased 50,00,000 equity shares in the company at a price of Rs 10 per share, totaling Rs 5 crore. Seven directors will be nominated to the newly incorporated company’s board of directors once both organizations inject further funds.
IIFL Finance will nominate three of these directors, while OFTPL will nominate the other three. Following that, these directors will appoint one Independent Director to the Board.
IIFL Finance will have exclusive lending rights to merchants onboarded by the newly formed firm under this JV, but OFTPL will not enter into a comparable technology arrangement with any other non-banking financial entity (NBFC).
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