Kotak Mahindra gained approval from the Reserve Bank of India on 20 October to purchase Sonata Finance for Rs 537 crore, according to the company's regulatory filing on October 20.
In February of this year, the bank had announced plans to purchase a 100 per cent share in Sonata Finance Private Limited, a non-banking finance company. The RBI gave its clearance for the transaction on October 19, the business reported in its stock filing. Following the transaction's conclusion, Sonata will be a "wholly-owned subsidiary of the bank."
“We now wish to update you that the RBI has, vide its letter dated October 19, 2023 received by the Bank on October 19, 2023, conveyed its approval to the Bank, for acquiring 100 per cent of the issued and paid up capital in Sonata, as mentioned above, and to make Sonata a Business Correspondent subsidiary of the Bank," said Kotak Mahindra Bank in its BSE filing on Friday.
The permission came before Kotak Mahindra released its September quarter results. On October 21, the bank is expected to release its Q2 earnings.
Previously, in September 2016, Kotak Mahindra paid Rs 139 crore for BSS Microfinance in an all-cash transaction. The corporation was able to establish a grip in the south thanks to the acquisition. However, Sonata Microfinance will support the firm in growing its presence in the northern states, according to Tapobrat Chaudhuri, Kotak Mahindra Bank's President and Head of Microfinance.
In Q1 of FY 2023–24, the company recorded an increase of 50.62 per cent in its consolidated net profit, coming in at Rs 4,150.19 crore. Its PAT significantly increased as a result of rising net interest income and better asset quality.
Kotak Mahindra Bank's shares were trading 1.81 per cent higher at Rs 1770 per share on the BSE at the day's closing.
