The Reserve Bank (RBI) on Thursday approved Kotak Mahindra Bank’s (KMB) proposal to acquire 100% stake in Sonata Finance for Rs 537 crore, the lender informed exchanges on Friday.
Upon completion of the transaction, Sonata Finance will become a wholly-owned business correspondent (BC) subsidiary of KMB.
Sonata Finance’s total income stood at Rs 305.7 crore during FY22 as against Rs 272.2 crore during FY21. Its bottomline rose to Rs 13.6 crore during FY22 from Rs 4.4 crore during the previous fiscal.
Founded in 2006, the Lucknow-based NBFC-MFI has a network of 502 branches, largely focused in 10 states, majorly in north India.
It has close to 900,000 customers, who are largely women borrowers under the joint liability group model. The company had a total loan book size of Rs 1,903 crore as of December 2022.
“The acquisition is expected to be value accretive given the economies of scale and unlocking of efficiencies along with the Bank’s own distribution footprint and technology,” KMB had said in a February 10 exchange filing.
KMB had entered the MFI business in 2017 through the acquisition BSS Microfinance and crossed customer base of 1 million as of Q3FY23.