MC EXCLUSIVE Axis Bank said to be in the lead to buy out CreditAccess Grameen

Axis Bank said to be in the lead to buy out CreditAccess Grameen

• Axis Bank aims to acquire 66.28% of CreditAccess Grameen from CreditAccess India BV.
• Deal could make CreditAccess Grameen a subsidiary of Axis Bank if completed
• Acquisition aims to boost Axis Bank's profitability and priority sector lending

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Four years after acquiring Citibank’s retail business in India, Axis Bank is said to be gearing up for another big buyout.

Highly placed sources say Axis Bank has a made a bid to acquire the promoter’s stake of CreditAccess Grameen, namely CreditAccess India BV which holds a 66.28 percent stake in the microfinance major. It is gathered that Axis Bank may have emerged as the lone bidder for the promoter’s stake in the leading MFI lender and if the process goes through, it will result in the bank taking a 100% stake in CreditAccess Grameen, thereby making it a subsidiary of the bank.

“The structure would be similar to the IndusInd Bank – Bharat Financial Inclusion Limited model,” said a banker aware of the deal, though he added that much would depend on valuations.

It is learnt that that bank has offered a valuation in the ballpark of 2.6x price to book multiples on a 12-months trailing basis, whereas the stock is currently trading at close to 3x multiples. “The deal going through will depend on whether CreditAccess BV is okay to conclude a transaction at a slightly discounted valuation multiple,” said another banker aware of the negotiations.

Bank of America is the investment banker running the process for CreditAccess. The sale process is said to have kick started around October last year. “There were a few buyers who conducted due diligence on the lender, but interests did not converted into bids,” said a banker who didn’t want to be named. CreditAccess with a loan book of over Rs 26,000 crore and a net worth of Rs 6,900 crore as on December 2025, is the largest standalone NBFC-MFI in India. “At this size, only a handful of interested buyers can absorb an acquisition of this size and it makes sense for a large bank like Axis,” the banker added.

Stating that this is CreditAccess India BV’s second attempt to monetize its investment in its Indian unit, the banker cited above said “valuations may not be the only deciding factor".

Emails sent to CreditAccess Grameen seeking comments on the deal talks remained unanswered till publishing the article. "We do not comment on unsubstantiated and baseless market rumours.  We have already clarified our position on this subject during our quarterly results commentary," said an official spokesperson for Axis Bank.

Why the deal is critical for Axis

An acquisition in the MFI space, especially the size of CreditAccess Grameen can help the bank on two counts –boost profitability and priority sector loans, both of which is are on a slightly weak wicket for the bank at the moment.

Axis Bank’s profitability measured as net interest margin has always been a challenge and has plateaued at sub-4 percent levels for years. Priority sector loans (PSL) is lately becoming a pain point for most private banks and this factor particularly came to light in the December FY26 quarter.

In 2021, Axis Bank made an attempt to acquire Spandana Sphoorthy Financial Limited, though talks fell through due to valuation disagreements.

That said, in the recently concluded investor call post results, when analysts quizzed Axis Bank’s management on a potential deal the bank didn’t reveal much. Subrat Mohanty, executive director, responding to a question on a likely deal said: "On the inorganic opportunity, we continue to be looking at what opportunities are available in the market. But given the size of possible opportunities, I don't think there is anything which meets some of the criteria, which will require us to raise capital for that kind of opportunity….I don't think there will be any capital requirement given the set that is available in that kind of scenario. We have no other comment to make in terms of what opportunities are available at this point in time”.

Separately responding to another question, the bank’s MD & CEO, Amitabh Chaudhry said, “I don't know what M&A you are referring to, we do not comment on any M&A, and we are not in any position to discuss any M&A at this point in time. People are quoting sources, good luck to them”.

Why the deal is critical for CreditAccess Grameen

Promoters of the MFI major have been seeking an exit for the last 2 – 3 years as the fund life of CreditAccess India BV is said to be nearing its terminal stages. Headquartered in Netherlands, the company's majority stake is held by a clutch of high net worth individuals. Olympus Capital Asia and Asian Development Bank, are among the prominent institutional investors holding 15 percent and 9 percent stake each in CreditAccess India BV.

While CreditAccess has MFI operations across Asian countries, India is said to be one of its best investment in terms of valuations, and the company is said to be wanting to monetize its Indian operations. An earlier attempt in 2024 to divest stake had to be halted due to the onset of an adverse credit cycle in the microfinance industry. With gradual green shoots resurfacing, CreditAccess is said to have restarted the sale process.