Kotak Mahindra Bank to acquire Sonata Finance for ₹537cr

Kotak Mahindra Bank on February 10 said that it will acquire 100 percent of equity shares of Sonata Finance Private Limited, a non-banking finance company, from existing shareholders for an all-cash consideration of approximately ₹537 crore.

The private lender said that it will acquire 2.6 crore equity shares of Sonata, of face valu10 each fully paid up.

The acquisition, Kotak Mahindra Bank stated, will be subject to regulatory and other approvals, including from Reserve Bank of India (RBI).

“The transaction provides the bank with the opportunity to scale up its operations in  the rural and semi-urban markets in the northern states of India,” the private lender said in a statement.

Moreover, Kotak also stated that it will “leverage Sonata Finance’s network to provide a wider suite of banking products to SFPL’s customer  base matching their emerging banking needs.”

This is not the first time that Kotak is foraying into the microfinance space. Earlier in 2017, the bank had acquired BSS Microfinance in an all-cash deal for ₹139 crore.

Further, Kotak Mahindra Bank also stated that Sonata’s network of 502 branches across 10 states is complementary to bank’s microfinance branch network.