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EY has successfully advised the shareholders of Sonata Finance Private Limited on its 100% sale to Kotak Mahindra Bank Limited for approximately INR 537 crore.
The synergistic acquisition will provide Kotak Mahindra Bank with enhanced presence in the financial inclusion segment, while existing customers of Sonata Finance get access to Kotak Bank’s product range and services.
Founded in January 2006, Sonata Finance Private Limited is a leading microfinance institution providing finance to economically weaker sections of the society, especially women, through the Joint Liability Group (JLG) and Individual Lending (IL) model.
In addition to AUM of over INR 1900 crore, the acquisition provides Kotak Mahindra Bank with access to Sonata’s 502 branches across 10 states, approximately 2,900 employees and almost a million women customers.
Customers of Sonata Finance will benefit from Kotak Mahindra Bank’s wider suite of banking products and best-in-class digital services.
With Banks wanting to play a larger role in the microfinance market, consolidation in the space is an important step towards accelerating financial inclusion in India. This deal continues the trend of strong returns for investors while being value accretive for the acquirer from day 1. At EY, we continue to remain excited about the future of rural markets and microfinance.