Kotak Mahindra Bank to acquire 9.98% stake in KFin Tech for Rs 310 cr

KFin Technologies provides technology solutions across a broad spectrum of asset classes spanning mutual funds, alternative investment funds and pension funds

Private sector lender Kotak Mahindra Bank on Monday announced that it would acquire a 9.98 per cent stake in KFin Technologies for Rs 310 crore. 

In an exchange filing, the bank said: “.. Kotak Mahindra Bank Limited has agreed to subscribe to 16.7 million equity shares in KFin Technologies Private Limited for a consideration of approximately Rs 310 crore, translating into an equity shareholding of 9.98 per cent on September 19, 2021. The transaction is subject to customary closing conditions”. 

KFin Technologies provides technology solutions across a broad spectrum of asset classes, spanning mutual funds, alternatives, and pensions. It provides registrar and transfer agency services to mutual funds, alternative investment funds, wealth managers, and corporates. KFin services 25 of 44 Indian mutual fund asset management companies. 

The company also provides back-office operations and data processing services, besides being a central record-keeping agency under the National Pension System.

It had a turnover of Rs 481 crore in FY21 and Rs 450 crore in FY20. In FY19, its turnover was to the tune of Rs 162 crore. The company also has subsidiaries in Malaysia and Bahrain. 

“...this investment is in line with our stated strategy of making minority investments in businesses which are professionally managed and have deep client entrenchment," Dipak Gupta, joint managing director, Kotak Mahindra Bank said. 

After the announcement of this acquisition, shares of the bank were trading at 0.7 per cent higher from the previous day's closing price on the BSE, pushing the market cap of the bank above Rs 4 trillion briefly. However, correction in the broader market resulted in shares of the lender closing 0.24 per cent lower at Rs 2,001.25.

Disclosure: Entities controlled by the Kotak family have a significant shareholding in Business Standard