Varanasi-based Utkarsh sold its shares to eight Indian institutional investors which will reduce its foreign shareholding to 48.5% from 85% helping to comply with Reserve Bank of India (RBI) norms which stipulate that foreign ownership in these new banks must be at 49% or below.
Talking about the transaction , Utkarsh said HDFC Ergo General Insurance Co. Ltd, HDFC Standard Life Insurance Co Ltd, ICICI Prudential Life Insurance Co Ltd, RBL Bank Ltd., Shriram Life Insurance Co. Ltd, Small Industries Development Bank of India (SIDBI) and local private equity funds such as Arpwood Investments and Faering Capital haver have bought stakes in their company. It did not give details of their ownership.
According to Utkarsh’s website,UK government’s development finance institution CDC, World Bank Group’s International Finance Corp (IFC), US-based non-profit Rockefeller Foundation backed Lok Capital and Norwegian Microfinance Initiative (NMI) are their foreign investors.
Explaining about the future initiatives, Govind Singh, MD and CEO, Utkarsh Micro Finance said, the fresh funds raised will be used to expand business, particularly in introducing new banking products. The investment will take care of capital requirements for the next 3-4 years.
ICICI Securities and Avendus Capital were the financial advisors to the company whereas BMR Legal was the legal advisor.
Utkarsh is based in UP, Bihar, Jharkhand, Madhya Pradesh and Chhattisgarh. The company began its operations in September 2009.
In its banking avatar, the company will provide affordable and accessible banking services which are process centric, technology enabled and people oriented.