Overview of the Acquisition:
on 28th March, the Kotak Mahindra Bank announces its full acquisition of Sonata Finance Pvt Ltd, for INR 537 Crores.
“The Bank has, today, acquired 100 percent of the issued and paid up capital of Sonata Finance Private Limited, a Non-Banking Finance Company (NBFC), a microfinance institution registered with the RBI for a total consideration of approximately Rs 537 crore”, Kotak Bank said in a regulatory filing.
Sonata operates in 10 states through 549 branches and has an Asset Under Management (AUM) of approximately Rs 2,620 crore as of December 31, 2023.
Shares of Kotak Bank were trading at Rs 1,789.35, up 0.77 percent on the BSE.
Kotak Mahindra Bank:
The Kotak Mahindra was founded in 1985 as Kotak Capital Management Finance, in 1986 the name was changed to Kotak Mahindra Finance Bank. In 2003, RBI gave a banking license to the company.
The bank has four business units: consumer banking, corporate banking, commercial banking, and treasury, bank’s growth, the bank has been ranked 502 in the world in 2023 for global 2000, 1430 for sales, 587 for profits, 509 for assets, and 344 for market value.
The biggest Shareholders in Kotak Mahindra Bank are Uday Kotak with a 56% stake in the company and Anand Mahindra with a 5% stake.
Sonata Finance Private Limited:
Sonata Finance Private Limited (SFPL) is a microfinance company that offers individual loans, money transfers, gold loans, and other services to customers in India. It was established in January 2006 and registered as NBFC with RBI.
As of May 2018, the stakeholders of Sonata Finance include Founders: 3.03% Funds: 79.11% Angel: 1.63% Other people: 0.44%.
Implications and Benefits for the Company:
Kotak Mahindra Bank’s acquisition of Sonata Finance may help it expand its microfinance reach and presence in rural and semi-urban areas of north India.
As of December 2022, Sonata had 9 lakh customers and Rs 1,903 crore in assets under management.
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