HDFC Bank to acquire 7.75% stake in Mintoak for Rs 31 cr

The private lender on Wednesday announced that it will acquire 7.75% stake in a fintech start-up, Mintoak Innovations (Mintoak) for a total cash consideration of Rs 31.14 crore.

Mintoak is a fintech start-up that provides a payments-led platform offering value-added services to merchants for engaging with their customers and for acquirers to enhance their engagement with merchants through digital engagement and value-added solutions. It had a turnover of Rs 11.28 crore and a net profit of Rs 1.47 crore in FY2022.

In a regulatory filing, HDFC Bank said that it has executed agreements to subscribe 21,471 fully paid up compulsory convertible preference shares (CCPS) of face value of Rs 20 each at a premium of Rs 9,711 for an aggregate consideration of Rs 9,731 per CCPS to be issued by Mintoak.

Further, the bank said that it will purchase 10,538 fully paid up equity shares of face value of Rs 10 each at a premium of Rs 9,721 taking the total consideration to Rs 9,731 per equity share from certain existing shareholders of Mintoak.

Post transaction, HDFC Bank will hold 7.75% stake of the total share capital of Mintoak on a fully diluted basis.

The private lender said that the financial investment in a growing fintech startup offers payments and value-added services to merchants and enhancing acquirers' digital engagement with merchants.

The acquisition is likely to be completed by 31 January 2023, subject to conditions precedent. As the overall stake of the bank after the transaction would be below 10%, this will not require regulatory approvals to proceed with the transaction, said the bank.

As of 30 September 2022, HDFC Bank's distribution network was at 6,499 branches and 18,868 ATMs/Cash Deposit & Withdrawal Machines (CDMs) across 3,226 cities / towns as against 5,686 branches and 16,642 ATMs / CDMs across 2,929 cities / towns as of 30 September 2021.

The private lender's net profit rose 20.1% to Rs 10605.78 crore on 19.2% increase in total income to Rs 46181.96 crore in Q2 FY23 over Q2 FY22.

Shares of HDFC Bank were up 0.71% to Rs 1,660.10 on the BSE.

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