RBI Approves Mirae Asset Mutual Fund’s 9.95% Stake Acquisition in Utkarsh Small Finance Bank

Mirae Asset Mutual Fund will acquire 9.95% paid-up share capital or voting rights in the Utkarsh Small Finance Bank within a year from the date of approval from RBI, the bank said in an exchange filing on Thursday. Mirae Asset Mutual Fund has a footprint not only in India but also a global presence in 16 countries, with $246 billion in assets under management. They have clients across 58+ countries as of the data provided until March 31, 2024.  Mirae Asset Mutual Fund will acquire 9.95% paid-up share capital or voting rights in the bank within a year from yesterday, the day they got the approval from RBI, the bank said in an exchange filing on Thursday.  This means that in order to complete the acquisition, we must meet all necessary legal requirements. This includes following any laws, regulations, and guidelines that govern the specific industry or type of transaction being conducted. Neglecting to meet these requirements could have legal repercussions or cause the agreement to collapse. All parties must ensure they are fully informed and compliant with all applicable laws and regulations during the acquisition process.

Role of Utkarsh Small Finance Bank:

The bank offers microfinance loans based on the Joint Liability Group (JLG) model to individuals. Additionally, it provides other retail asset loans, including micro, small, and medium enterprise (MSME) loans, housing loans (HL), personal loans, commercial vehicle loans, construction equipment loans, and wholesale lending to borrowers.

Utkarsh Small Finance Bank & Stock Performance: 

The bank’s total loan portfolio in the first quarter of this fiscal was Rs 18,798 crore, an increase of 30.6% from the previous year. The deposits experienced a 30% increase year-on-year to Rs 18,163 crore. The CASA ratio, on the other hand, experienced a 19% decline sequentially. Today, the stock has increased by 2% and is currently trading at Rs. 51 per share.

Conclusion: Mirae Asset Mutual Fund has acquired almost a 10% stake in Utkarsh Small Finance Bank, which is expected to be a game changer in the near future.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.