From February 1, 2024, Fincare Small Finance Bank (Fincare SFB) and AU Small Finance Bank (AU SFB) are all set to join forces. The merger is contingent on receiving all required clearances. AU SFB declared its support of the merger, according to the regulatory filing. According to the conditions of the merger, for every 2,000 shares that Fincare SFB stockholders own, they will receive 579 shares of AU SFB. Following the deal, it is anticipated that current Fincare SFB stockholders will hold a 9.9% ownership stake in AU SFB.
A number of crucial requirements must be met for this deal to proceed, including approval from the shareholders of Fincare SFB and AU SFB, regulatory approval from the Competition Commission of India (CCI) and the Reserve Bank of India (RBI), and a capital infusion of Rs. 700 crores from Fincare SFB’s promoters.
All Fincare SFB personnel will become part of the AU SFB family following the merger, according to AU SFB’s confirmation.
The Managing Director & CEO of Fincare SFB will assume the role of Deputy CEO of AU SFB following the merger as part of this strategic alliance. To further bolster the leadership group, Divya Sehgal, a current director on the board of Fincare SFB, will join the board of AU SFB.
“The scheme is subject to approval of the respective shareholders of the transferor company (Fincare Small Finance Bank Ltd) and transferee company (AU Small Finance Bank Ltd), the Reserve Bank of India (RBI) and the Competition Commission of India (CCI),” AU SFB said in a regulatory filing.
The collaboration broadens AU SFB’s asset and deposit franchise, which already has a substantial presence in South India. There are 1,292 banking sites operated by Fincare SFB, with 339 located in rural areas, 640 in semi-urban areas, 179 in urban areas, and 73 in metro areas. Nearly two dozen states are covered by it, including Uttar Pradesh, Himachal Pradesh, Bihar, Chhattisgarh, Gujarat, Haryana, and Andhra Pradesh.
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