Fincare Business Services has divested its 7% stake in AU Small Finance Bank for ₹803 crore in a transaction. The company’s stake was once given to Fincare Small Finance Bank. The company sold over 1.27 crore shares, or 1.7% equity in AU Small Finance Bank located in Jaipur, as part of a market transaction to issue each share at ₹630, totalling ₹803.63 crores for the total stake.
Details of the Transaction
The recent transaction involved notable institutional investors such as DSP Mutual Fund, Morgan Stanley Asia Singapore, and Societe Generale (SocGen). As a result of the sale, Fincare Business Services’s stake in AU SFB decreased from 8.04% to 6.32%.
This block deal took place on the National Stock Exchange (NSE) and aligns with Fincare’s strategy to streamline its investment portfolio post-merger with AU SFB. In October, the boards of AU SFB and Fincare sanctioned an all-stock merger, representing a milestone in the small finance banking sector.
Market Impact and AU SFB’s Performance
After a recent deal, AU Small Finance Bank’s stock increased by 1.15% to ₹633 per share on the NSE. The price increase reflects investors’ confidence in the strength of the bank’s fundamentals and growth potential.
AU SFB has emerged as a player in the financing banking sector and has demonstrated performance reliability. In the last quarter, the bank reported a profit of ₹502 crore, a 30% increase year-over-year. The bank’s total income also increased this quarter, rising to ₹4,315 crore from ₹2,773 crore in the same quarter last year.
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Strategic Implications
Fincare Business Services’ sale is viewed as a strategic decision to leverage AU SFB’s strong market performance while adjusting its investment approach after the merger. The participation of financial heavyweights such as Morgan Stanley and SocGen emphasizes AU SFB’s appeal as an investment opportunity.
Additionally, this deal highlights the growing investor interest in India’s small finance bank space, which has shown its ability to grow and withstand challenges by catering to underbanked and unbanked populations.
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Conclusion
Fincare’s decision to divest from AU SFB reflects a strategic move aimed at streamlining its portfolio. Meanwhile, institutional investors maintain their trust in the bank’s potential. With AU SFB’s ongoing growth and market expansion, it solidifies its position in the small finance bank sector, drawing interest from both domestic and global investors.
People May Ask
What portion of AU Small Finance Bank did Fincare Business Services divest?
Fincare Business Services divested a 1.7% shareholding, equivalent to over 1.27 crore shares, in AU Small Finance Bank.
Who were the key purchasers of AU SFB shares during the deal?
The key purchasers included DSP Mutual Fund, Morgan Stanley Asia Singapore and Societe Generale.
What was the average selling price per share in this deal?
The shares were sold at an average price of ₹630 per share.
How did this deal impact Fincare’s ownership stake in AU SFB?
After the deal Fincare’s stake in AU SFB decreased from 8.04% to 6.32%.
What was the market response to the sale of AU SFB shares?
Following the transaction, AU SFB shares saw a 1.15% increase, closing at ₹633 per share on the NSE.
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