In what could be the first-ever merger in the small finance banking space, Fincare Small Finance Bank is set to merge with AU Small Finance Bank (AU SFB) in an all-share deal. Fincare shareholders will receive 579 AU shares for every 2,000 shares held.
Currently, AU’s market capitalization stands at Rs 46,000 crore, the highest among small finance banks. The market capitalization of the merged entity will be a little over Rs 50,000 crore. The deal values Fincare at around Rs 4,416 crore.
Interestingly, Bengaluru-based Fincare received approval from the Securities and Exchange Board of India (Sebi) for an initial public offering in September this year, under which the bank planned to raise Rs 625 crore.
“…the Board of Directors of AU Small Finance Bank Limited at its meeting today on October 29, 2023, inter alia, approved the merger plan for the merger of Fincare Small Finance Bank Limited into and with AU Small Finance Bank,” the AU said with its headquarters in Jaipur in a stock market listing late in the evening.
The merger is subject to approval by the Reserve Bank of India and the Competition Commission of India, the AU said.
“Under the Scheme, the ‘Appointed Date’ shall be February 1, 2024, or such other date as may be mutually determined by the Transferor Company and the Transferee Company and approved by the RBI,” the exchange notification said.
AU, the largest among small finance banks, has a balance sheet size of Rs 95,977 crore. Its deposit base stands at Rs 75,743 crore, and gross advances stand at Rs 65,029 crore.