Fincare Small Finance Bank and AU Small Finance Bank Announce Landmark Merger Deal

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In a groundbreaking development within the small finance bank sector, Fincare Small Finance Bank is on the verge of a merger with AU Small Finance Bank (AU SFB), marking the industry’s first such consolidation. This merger will be an all-share transaction, with Fincare shareholders to receive 579 shares of AU for every 2,000 shares they hold.

AU SFB currently boasts the highest market capitalization among small finance banks, standing at Rs 46,000 crore. Upon completion of the merger, the combined entity is expected to have a market capitalization slightly exceeding Rs 50,000 crore. This merger places Fincare’s valuation at approximately Rs 4,416 crore.

Notably, Fincare received approval from the Securities and Exchange Board of India (Sebi) for an initial public offering (IPO) in September of this year, with plans to raise Rs 625 crore through the IPO.

According to a recent announcement made by AU Small Finance Bank, “the Board of Directors of AU Small Finance Bank Limited…has considered and approved the scheme of amalgamation for the amalgamation of Fincare Small Finance Bank Limited into and with AU Small Finance Bank.” This merger is contingent on approvals from the Reserve Bank of India and the Competition Commission of India.

As per the scheme, the “Appointed Date” for the merger is set for February 1, 2024, unless mutually altered and approved by the RBI.

AU SFB, the largest small finance bank, currently possesses a balance sheet size of Rs 95,977 crore. Its deposit base totals Rs 75,743 crore, with gross advances amounting to Rs 65,029 crore.