The private lender HDFC Bank stated on Wednesday that it will buy a 7.75 per cent share in Mintoak Innovations (Mintoak) for a total cash consideration of Rs 31.14 crore.
Mintoak is a fintech startup that offers a payments-led platform with value-added services for merchants to communicate with their customers and for acquirers to improve their engagement with merchants through digital engagement and value-added solutions. In FY2022, it had a turnover of Rs 11.28 crore and a net profit of Rs 1.47 crore.
HDFC Bank stated in a regulatory filing that it has entered agreements to subscribe for 21,471 fully paid up compulsory convertible preference shares (CCPS) with a face value of Rs 20 each at a premium of Rs 9,711 for an aggregate payment of Rs 9,731 per CCPS to be issued by Mintoak.
Furthermore, the bank stated that it will purchase 10,538 fully paid up equity shares with a face value of Rs 10 each at a premium of Rs 9,721 from certain current Mintoak shareholders, bringing the total price to Rs 9,731 per equity share.
Following the deal, HDFC Bank will own 7.75 per cent of Mintoak’s total share capital on a fully diluted basis.
According to the private lender, the financial investment in a rising fintech business provides merchants with payments and value-added services while also improving acquirers’ digital connection with merchants.
Subject to certain restrictions, the acquisition is expected to be completed by January 31, 2023. The purchase will not require regulatory clearances because the bank’s entire shareholding after the sale will be less than 10%, according to the bank.
HDFC Bank’s distribution network had 6,499 branches and 18,868 ATMs/Cash Deposit & Withdrawal Machines (CDMs) throughout 3,226 cities / towns as of 30 September 2022, up from 5,686 branches and 16,642 ATMs / CDMs across 2,929 cities / towns as of 30 September 2021.
In Q2 FY23, the private lender’s net profit increased 20.1 per cent to Rs 10605.78 crore on a 19.2 per cent increase in total income to Rs 46181.96 crore compared to Q2 FY22.
