Kotak Mahindra, on Friday, received approval from the Reserve Bank of India to acquire Sonata Finance for ₹537 crore, the company said in its filing on Friday.
The bank had announced to acquire 100% stake of the Non-Banking Finance Company, Sonata Finance Private Limited, in February this year. The acquisition received approval of the RBI on October 19, the company said in its stock filing. After the completion of the transaction, Sonata will become a ‘wholly-owned subsidiary of the Bank’.
“We now wish to update you that the RBI has, vide its letter dated October 19, 2023 received by the Bank on October 19, 2023, conveyed its approval to the Bank, for acquiring 100% of the issued and paid up capital in Sonata, as mentioned above, and to make Sonata a Business Correspondent subsidiary of the Bank,” said Kotak Mahindra Bank in its BSE filing on Friday.
The approval has come prior to the announcement of September quarter result by Kotak Mahindra. The bank is set to announce its Q2 results on October 21.
Earlier, Kotak Mahindra bought BSS Microfinance in an all-cash deal for ₹139 crore in September 2016. The acquisition had helped the company in gaining its stronghold in the southern part. However, Sonata Microfinance will help the company in expanding its presence in the northern states, Tapobrat Chaudhuri, President and Head of microfinance business of Kotak Mahindra Bank told moneycontrol.
The company reported a 50.62 per cent rise in its consolidated net profit at ₹4,150.19 crore in the first quarter of the current financial year. The sharp rise in its PAT was the result of increase in net interest income and improved asset quality.