India’s first micro finance company Bharat Financial Inclusion is close to deciding on a buyer and is in the final stage of discussions with two companies for the same.
According to a report by Mint, IndusInd Bank and RBL Bank are the two remaining potential buyers in the race to acquire the micro-finance company and are in talks with investment bank Credit Suisse, which has been appointed by Bharat Financial Inclusion for the purpose.
According to persons privy to the information, the swap ratio being considered is one share of IndusInd Bank for 1.75 shares of Bharat Financial; for RBL, the proposed swap ratio is 2:1. A deal is likely to be announced by the end of the month.
This sale proposal will be presented by the board of directors to the shareholders for approval. Morgan Stanley Mauritius Co. holds a 6.74 percent stake in Bharat Financial Inclusion, while East Bridge Capital Master Fund, Mathews India Fund, Amansa Holding and BNP Paribas Arbitrage own close to 3 percent each.
Bharat Financial Inclusion has 1,408 branches and employs 15,284 people. With 6.8 million customers, it has a loan book of Rs 10,971 crore.
For the micro-finance institution (MFI), the deal comes at a time when it is faced with tough competition from both universal and small finance banks.“We do not intend to respond to market speculation. However, as informed earlier, the company has been exploring various options from time to time,” a spokesperson for Bharat Financial said in an emailed statement.