IDFC First bank to acquire Vaya MFI’s assets

“The portfolio buyout is intended at meeting the priority sector loan (PSL) requirements of IDFC First Bank. Vaya would remain a continuing entity after the buyout,” said a person aware of the matter.

Further, it is gathered that some employees of the MFI are likely to be absorbed by the bank, especially in regions where the bank doesn’t have microfinance presence.

E-mail sent to IDFC First Bank regarding the matter remained unanswered till the time of press.

As of March 31, 2022, Vaya’s loan book stood at ₹1,202 crore and its net worth was ₹310 crore. The deal is set to conclude by early January and would be the among the notable buyouts by a bank in the recent times.

Kotak Mahindra Bank has been actively pursuing this route in the last two years. Banks are increasingly preferring to shop for portfolios rather than go through the traditional M&As, as portfolio buyouts work favourably in terms of valuations and leave flexibility to the buyer and the seller to structure the transaction. More importantly, it removes the layers of regulatory permissions that the entities may have to seek in a M&A deal.