This deal has been quite surprising considering the fact that over the last year the promoters were scouting for partners which included Marubeni and GE Capital. These deals reportedly fell through as there has been a clash over the pricing and the stake.

The Lalbhais then were not receptive to let the majority stake to the partner. However, the current deal with ICICI seems to be diagonally opposite to what was planned earlier as the entire promoter's stake is being bought out.

Though this may fit into the Lalbhai group's plan to stick to their areas of core competence, the timing of this sell-out seemsto indicate some desperation. During the end of December 1997 when GE Capital envisaged interest in the company, the share price was quoting around Rs 35. Thus Anagram has lost due to indecision from the management. The reason for this distress sale from the Lalbhais seems to be the after effects of the stringent RBI regulations imposed on the NBFCs. These regulations have brought the NBFCs virtually to a standstill making it extremely difficult for players like Anagram to sustain their business. Thus sell-off seems to be the best option left.

Further the recessionary trend in the automobile industry has further tightened the noose around the company's neck. Anagram being an auto finance major operating in the niche segment like truck finance, the sluggish offtake in these sector has seen the company's fortunes plummet. The total income has seen a marginal fall of 1.68 per cent from Rs 142.45 crore in 1996 to Rs 140.06 in 1997, the net profit has seen a whopping fall of 80 per cent from Rs 22.61 crore to4.56 crore. Market sources claim that the position has further worsened over the last few months.

This deal, however, fits perfectly into the scheme of things for ICICI. With a greater retail focus envisaged for ICICI, this buy-out after the takeover of ITC Classic earlier, would give the company the necessary impetus for growth.

ITC Classic's retail network in the eastern part of the country would be complemented by Anagram's extensive 85 branch network in Gujarat and Rajasthan, and the deal fits well in the company's strategy to gain retail reach. Although much hype has been created on the takeover of Anagram's housing finance subsidiary, Anagram Housing Finance Ltd, it is too small a company to warrant any comment.