Exploring the Implications of Fincare SFB's Merger with AU Small Finance Bank

31 Oct, 2023

Exploring the Implications of Fincare SFB's Merger with AU Small Finance Bank

Fincare Small Finance Bank (Fincare SFB) is poised to merge with AU Small Finance Bank (AU SFB) effective February 1, 2024, pending the necessary approvals. AU SFB, in a late-night regulatory filing, has given the green light for this amalgamation. Under the terms of the merger, shareholders of Fincare SFB will receive 579 shares in AU SFB for every 2,000 shares they currently hold in Fincare SFB. This arrangement will result in existing shareholders of Fincare SFB maintaining an approximate 9.9% ownership stake in AU SFB.

The successful execution of this transaction hinges on several critical conditions, including consent from shareholders of both Fincare SFB and AU SFB, regulatory approvals from the Reserve Bank of India (RBI) and the Competition Commission of India (CCI), and a capital infusion of Rs. 700 crores by the promoters of Fincare SFB.

AU SFB has affirmed its commitment to welcoming all employees of Fincare SFB into the AU SFB family post-merger.

As part of this strategic merger, the Managing Director & CEO of Fincare SFB will assume the role of Deputy CEO at AU SFB following the merger. Furthermore, Divya Sehgal, a current director on Fincare SFB's board, will join AU SFB's board, enhancing the strength of the leadership team.

Fincare Small Finance Bank, a digitally empowered small finance bank, offers a wide array of deposit and asset solutions to its customers, boasting a total customer base of approximately 54 lakh.