Kotak Mahindra Bank to buy 10% stake in KFin Technologies

On 20 September 2021, Monday, Kotak Mahindra Bank revealed that it would buy a 9.98% stake in Hyderabad-based KFin Technologies. The financial institution will fund the deal via a cash consideration of approximately Rs. 310 crores. That said, this transaction is contingent on the usual closing conditions. As per reports, the deal is likely to conclude by October this year.

Once the company made this announcement, its shares surged over 1% on the BSE, recording an intraday high of Rs. 2037.15. For investors who are interested in buying shares of Kotak Mahindra Bank following this deal, it is vital to know some key details about KFin Technologies.

A Quick Glance at KFin Technologies Private Limited

Established in 2017, KFin Technologies provides an extensive range of solutions related to financial technology. Its services range across various asset classes, covering mutual funds, insurance, and more.

This company offers its solutions to more than 20 Indian asset management companies. In addition, KFin’s customer base includes 23 pension and fund managers all over Asia, including Hong Kong, the Philippines, and Malaysia. Currently, this company serves more than 300 AIFs schemes that were introduced by more than 100 fund managers.

A Few Noteworthy Highlights

The following are some key highlights regarding KFin Technologies:

• Besides National Securities Depository Limited (NSDL), this company is one of the only two central record-keeping agencies in India for the National Pension Scheme.
• KFin Technologies is expanding its operations in relation to fundingadministration as well as transaction processing.
• In FY 2020-21, this company reported an overall turnover of Rs. 481 crores.
• KFin Technologies has established subsidiaries in Malaysia as well as Bahrain.
• As of 31 December 2020, the cash and cash equivalents of this company stood at Rs. 105 crores.
• At the end of March 2021, it reported consolidated revenue of Rs. 486 crores. However, in fiscal 2021, the company’s net worth plunged by 17% on a year-over-year basis to approximately Rs. 321 crores.

Final Words

Kotak Mahindra Bank had stated that its strategy included making small investments in professionally managed companies having a deeply entrenched client base. Thus, this purchase of a stake in KFin Technologies is in line with the financial institution’s strategy. Kotak Mahindra Bank believes that this investment would enable them to create value for the company’s shareholders in the long term.

For Investors who are optimistic regarding this deal, it is essential to look at the operational and financial highlights regarding KFin Technologies before buying shares of Kotak Mahindra Bank. Moreover, investors must also make sure to consider various other aspects regarding the financial institution, such as the strengths, weaknesses, and opportunities of the company.

Frequently Asked Questions

1. How many shares will Kotak Mahindra Bank purchase as part of the deal?

Kotak Mahindra Bank will be subscribing to 1,67,25,100 shares of KFin Technologies.

2. How can an individual buy Kotak Mahindra Bank stock?

Individuals who have never invested in stocks before need to open a DEMAT account to buy shares of Kotak Mahindra Bank. However, individuals who already have a trading account with Angel One can buy Kotak Mahindra Bank shares via the Angel One app.

3. Which entity has the highest stake in KFin Technologies?

General Atlantic, a private equity fund based in America, is the highest stakeholder (83.25%) in KFin Technologies.