Kotak Mahindra Bank (“KMBL” / “Bank”) announced that it has executed binding share purchase agreement(s) to acquire 100% of equity shares of Sonata Finance Private Limited (“SFPL”), a Non-Banking Finance Company, classified as an NBFC-MFI, from existing shareholders, subject to regulatory and other approvals, including from Reserve Bank of India.
The acquisition is for an aggregate all-cash consideration of approximately ₹ 537 crore. With this acquisition, SFPL will be a wholly owned subsidiary of the Bank after receiving regulatory and other approvals. SFPL provides a strong platform to enable the Bank to become a significant player in the financial inclusion segment. It has an AUM of 1,903crore and a branch network of 502 branches across 10states, providing the Bank with the opportunity to scale up its operations in the rural & semi-urban markets in the northern states of India.
The acquisition is expected to be value accretive from inception due to economies of scale and unlocking of efficiencies. The Bank will also leverage SFPL’s network to provide a wider suite of banking products to its customer base. Manish Kothari, President – Commercial Banking, Kotak Mahindra Bank said, ” There are significant potential synergies to be realized 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”.