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Kotak Mahindra Bank (KMB) has entered into a binding agreement to acquire 100% of equity shares of Sonata Finance Pvt Ltd (SFPL) for ₹537 crore in cash.
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The acquisition is expected to be completed in H1 FY24 and after completion, SFPL will become a wholly-owned subsidiary of KMB.
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KMB last made an acquisition of an NBFC-MFI in 2017 when it acquired 99.49% of equity shares of BSS Microfinance.
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SFPL provides a strong platform for KMB to become a significant player in the financial inclusion segment.
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SFPL had AUM of ₹1,903 crore and serviced a customer base of about 9 lakh through 502 branches across 10 states as of December 2022.
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SFPL complements KMB's microfinance network and there are significant potential synergies to be realized from this acquisition.
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This acquisition is in line with KMB's vision and strategy in the financial inclusion segment.
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KMB has already integrated and steadily grown its presence in the financial inclusion segment after acquiring BSS Microfinance.
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SFPL was started with the objective of providing financing to underserved customer segments.
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The CEO and MD of SFPL believes the mission is best served in a scalable and sustainable manner on a big bank's platform.