Fincare SFB Set to Merge with AU Small Finance Bank The notification states the appointed date for the merger as Feb. 1, 2024. With this merger, AU SFB, the largest among small finance banks, will have its market capitalization reach slightly over INR 50,000 crore. The deal will see AU SFB acquire Fincare Small Finance Bank for INR 4,416 crore
By Paromita Gupta •
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On Sunday, AU Small Finance Bank announced through stock exchange notification that the board had approved the merger with the IPO-bound Fincare Small Finance Bank in an all-share deal.
"The Board of Directors of AU Small Finance Bank Limited, at its meeting held today on October 29, 2023, has, inter alia, considered and approved the scheme of amalgamation for the amalgamation of Fincare Small Finance Bank Limited into and with AU Small Finance Bank," read the notification.
With the approval of the Reserve Bank of India and the Competition Commission of India, the deal will see Fincare Small Finance Bank shareholders receiving 579 equity shares of AU SFB for every 2000 shares held.
The notification states the appointed date for the merger as Feb. 1, 2024.
Established as a vehicle finance company in 1996, AU Small Finance Bank currently has a m-cap of INR 43,742 crore. It received an in-principle nod from the RBI to operate a small finance bank in 2015 and started formal operations in 2017.
On October 28, AU SFB posted its Q2 FY24 results and clocked in a Net profit of INR 402 Crore as compared to INR 343 Crore in Q2'FY23.
Fincare Small Finance Bank has a network of 1,231 banking outlets, including 373 business correspondent outlets. It got the approval from SEBI for its INR 625 crore initial public offering last month and plans to raise it through fresh issuance of shares and offer for sale.
According to AU Small Finance Bank, the merger will help leverage "significant complementarities" between the two parties. These will include pan-India franchise distribution, portfolio diversification with specific reference to microfinance, and cross-selling opportunities.
With this merger, AU SFB, the largest among small finance banks, will have its market capitalization reach slightly over INR 50,000 crore. The deal will see AU SFB acquire Fincare Small Finance Bank for INR 4,416 crore.
