Kotak Mahindra Acquires 100% Stake in Sonata Finance: Major Effect on Its Share Price?

Kotak Mahindra Bank, March 28, 2024, acquires 100% stake, i.e., issued and paid-up capital in Sonata Finance Private Limited for Rs 537 Crore. With this acquisition, Sonata Finance Private Limited has now become a fully owned subsidiary of Kotak Mahindra and will be fully operational under the supervision of Kotak Mahindra Bank. It is reported that Sonata Finance Pvt. Ltd is currently operating in 10 states through its 500+ branches as of December 31, 2023, and the Asset Under Management (AUM) of approx Rs 2600 Crore.

The stock of Kotak Mahindra Bank closed its price at Rs 1775 on Wednesday, while on Thursday, the stock rallied up to 1.6% positive, i.e., Rs 1803.5, but closed at Rs 1785.5. However, the company's stock is around 12% negative from its 52-week high of ₹2,063. The fluctuation underscores the recent volatility and investor sentiment after the acquisition of Sonata Finance Limited.

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Previous actions of Kotak Mahindra

In February 2023 and October 2023, Kotak Mahindra Bank had previously shown great interest in acquiring Sonata Finance. On March 28, 2024, Kota Mahindra Bank finally acquired Sonata Finance (NBFC-MFI) under its supervision.

In November 2023, a bank announced the sale of 51% of Kotak Mahindra General Insurance to Zurich Insurance for ₹4,051 crore. They planned to achieve this through a mix of fresh capital infusion and share purchase. Furthermore, they intended to sell a further 19% stake within a three-year time span.

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