Sonata Finance, a microlender, will be acquired by Kotak Mahindra for $65 million.

 Sonata Finance, a microlender, will be acquired by Kotak Mahindra for $65 million.

In an all-cash acquisition, Kotak Mahindra Bank announced on Friday that it will purchase Sonata Finance Pvt Ltd for Rs 5.37 billion ($65.04 million), with the goal of increasing lending to households that are economically vulnerable and disadvantaged.

For a total of roughly Rs 5.37 billion, the private lender said in an exchange filing, it will pay for 26.45 million equity shares of microlender Sonata, each with a face value of Rs 10 and completely paid up.

The bank will then own a 100% interest in Sonata as a result.

Kotak has previously experimented with microfinance. In 2016, the bank paid Rs. 1.39 billion in cash to purchase BSS Microfinance.


According to Kotak, the purchase of Sonata gives the bank a powerful and leveraged platform that will allow it to compete favourably in the financial inclusion market.

The bank's microfinance branch network is complemented by Sonata's network of 502 branches spread across 10 states.


The acquisition is anticipated to increase the value of the bank's own distribution footprint and technologies as well as unlock economies of scale and efficiencies, the filing states.

In order to address Sonata's customer base's changing banking needs, the bank will also make use of Sonata's distribution network and provide a comprehensive suite of financial products.

According to Kotak, the transaction is pending all necessary clearances, including those from the Reserve Bank of India (RBI).