Fair trade regulator CCI has approved the proposed acquisition of Religare Finvest's car leasing business by Magma Fincorp, saying the deal is unlikely to have an adverse impact on competition.
Magma Fincorp is to acquire complete car leasing operations of Religare Finvest, an NBFC and part of diversified group Religare.
In its order issued yesterday, Competition Commission of India (CCI) said the proposed combination is not likely to have an appreciable adverse effect on competition in India. Both Magma Fincorp and Religare Finvest are Non-Banking Financial Companies (NBFC).
In December, they had entered into an 'Agreement for Sale' whereby Magma would acquire all rights, title and interest "in the vehicles and all receivables arising therefrom, whether under the lease agreements/vehicles purchase agreement or otherwise, which constitutes the entire leasing portfolio of Religare".
CCI said both Magma and Religare are "inter-alia engaged in the leasing business, which is characterised by the presence of a large number of players and insignificant entry barriers".
Further, the regulator said "the combined market share of Magma and Religare in the market for car leasing is not significant enough to give rise to any adverse competition concern".
Magma is engaged in the business of providing commercial vehicle finance, construction equipment finance among others to individuals, corporates and other entities in India, CCI said.
Following the agreement, the two entities had approached CCI for its approval on December 28, 2012.