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In All-Share Agreement, AU Small Finance Bank and Fincare SFB Poised to Merge

Fincare Small Finance Bank and AU Small Finance Bank (AU SFB) are scheduled to merge in an all-share agreement that may be the first merger in the history of small finance banks. For every 2,000 shares held, Fincare shareholders will receive 579 shares of AU.

With its current market capitalization of Rs 46,000 crore, AU is the largest small financing bank. The combined company will have a market valuation of little over Rs 50,000 crore. Fincare is valued at about Rs 4,416 crore as a result of the purchase.

It’s interesting to note that Bengaluru-based Fincare, with plans to raise Rs 625 crore through an IPO, was given approval by the Securities and Exchange Board of India (Sebi) in September of this year.

The Jaipur-headquartered AU stated in a late-evening stock exchange notification that “…the Board of Directors of AU Small Finance Bank Limited, at its meeting considered and sanctioned the proposal of merger for the amalgamation of Fincare Small Finance Bank Limited into and with AU Small Finance Bank.”

According to AU, the merger is contingent to clearance from the Competition Commission of India and the Reserve Bank of India.

“As per the Scheme, the ‘Appointed Date’ shall be February 1, 2024, or such other date as may be fixed mutually by the Transferor Company and the Transferee Company and sanctioned by the RBI,” the notice of exchange stated.

At Rs 95,977 crore, AU is the biggest small financing bank in terms of balance sheet size. Gross advances amount to Rs 65,029 crore, while the deposit base is Rs 75,743 crore.

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