Latest News | Kotak Mahindra Bank Acquires Microlender Sonata for Rs 537 Cr in All Cash Deal
Get latest articles and stories on Latest News at LatestLY. Kotak Mahindra Bank (KMB) on Friday announced that it has fully acquired microlender Sonata Finance for Rs 537 crore.
Mumbai, Feb 10 (PTI) Kotak Mahindra Bank (KMB) on Friday announced that it has fully acquired microlender Sonata Finance for Rs 537 crore.
The acquisition, which is the second such deal for KMB after acquiring BSS Microfinance in 2017, will give the bank access to 502 branches across 10 states and add 9 lakh women customers to its base, according to a statement.
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"The acquisition is for an aggregate all-cash consideration of approximately Rs 537 crore," it said, adding that Sonata will be a wholly-owned subsidiary of the bank once the transaction gets regulatory approvals.
The two-decade-old Sonata, a registered Non Bank Finance Company-Microfinance (NBFC-MFI), had Rs 1,903 crore of Assets Under Management (AUM) as of December 31, 2022.
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The deal provides a strong platform to aid the bank in becoming a significant player in the financial inclusion space, catering to economically weaker and underserved households in a commercially viable manner, it said.
It presents an opportunity before the bank to scale up its operations in the rural and semi-urban markets in the northern states of India, the statement said.
The deal is value accretive from inception given the economies of scale and unlocking of efficiencies along with the bank's own distribution footprint and technology, the statement said, adding that KMB will provide a wider suite of banking products to Sonata's customer base.
"This acquisition is in sync with our broad vision and strategy," the bank's president for commercial banking Manish Kothari said, added that the BSS deal in 2017 has helped it create a Rs 5,300-crore financial inclusion book serving 1,300 customers.
"There are significant potential synergies to be realised as a result of this acquisition and we look forward to continue serving the customers in a smooth and consistent manner and ensuring their needs are well-served going forward," he added.
Sonata's chief executive and managing director Anup Kumar Singh said the company's objective of providing financing to underserved customer segments is best served in a scalable and sustainable manner on a big bank's platform.
Kotak Mahindra Bank's scrip closed 0.06 per cent up at Rs 1,771.55 apiece on the BSE on Friday.
(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)