Private-sector lender RBL Bank Ltd has increased its stake in Mumbai-based financial services products distributor Swadhaar Finserve Pvt. Ltd to 58.4% from 30% in an all-cash deal.
Swadhaar has now become the lender’s subsidiary, RBL Bank said in a stock-exchange disclosure. It didn’t disclose the deal value citing confidentiality reasons.
Swadhaar is backed by impact investors MicroVest and Michael and Susan Dell Foundation. It is not immediately known whether they have exited the company following this transaction. The two investors had partially exited in September 2016 when RBL Bank bought the initial 30% stake.
Swadhaar group, which comprises Swadhaar FinServe, Swadhaar Information and Management Services and Swadhaar FinAccess, was founded in 2005.
Swadhaar FinServe distributes financial products as business correspondents. Swadhaar Information was merged with Swadhaar FinServe earlier this year. Swadhaar FinAccess offered micro-credit in Mumbai.
Swadhaar FinServe started operations in 2008 as a non-banking financial company, taking over the micro-credit portfolio of Swadhaar FinAccess and subsequently converting to an NBFC-microfinance institution in 2010.
In 2015, Swadhaar FinServe applied to the Reserve Bank of India to surrender its NBFC licence and operate as a business correspondent. This was approved in January 2016.
In 2015-16, the company’s total income was Rs 29.5 crore and profit after tax was Rs 1.3 crore.
RBL Bank is one of several scheduled commercial banks that are increasingly looking at acquiring companies in the financial services segment to increase their bandwith.
In October, IndusInd Bank Ltd agreed to buy microlender Bharat Financial Inclusion Ltd in an all-stock deal. In July, Axis Bank Ltd had agreed to acquire e-commerce firm Snapdeal’s digital payments platform FreeCharge for about Rs 385 crore ($60 million).