Kotak Mahindra Bank Acquires Sonata Finance Pvt Ltd, Making it a Wholly-Owned Subsidiary
On March 28, Kotak Mahindra Bank Ltd, a private sector lender, announced that it has acquired 100 percent of the issued and paid-up capital of Sonata Finance Pvt Ltd. The acquisition was made for a total consideration of approximately Rs. 537 crore. As a result of this transaction, Sonata Finance has become a wholly-owned subsidiary of Kotak Mahindra Bank.
Sonata Finance is a non-banking finance company and a micro finance institution registered with the Reserve Bank of India (RBI). It operates in 10 states through 549 branches and has an Asset Under Management (AUM) of approximately Rs 2,620 crore as of December 31, 2023.
The acquisition was approved by the RBI on October 20, 2023, allowing Kotak Mahindra Bank to acquire Sonata Finance and make it a business correspondent subsidiary. Kotak Mahindra Bank had received a letter from the RBI on October 19, 2023, conveying its approval for the acquisition.
Prior to the announcement, on August 28, 2023, Moneycontrol had reported that Kotak Mahindra Bank was hopeful of receiving approval for its acquisition of Sonata Finance in the fiscal year 2024.
As of the time of the announcement, Kotak Mahindra Bank’s shares were up nearly 1 percent at Rs.1,792.35. However, on a year-to-date basis, the bank has experienced a decline of over 6 percent in its share value.
