In a major acquisition deal in the financial sector, India’s leading bank IndusInd Bank has announced the acquisition of Bharat Financial Inclusion (BFI). The company is a micro lender and after its acquisition, it would enable IndusInd Bank to strengthen its presence in microfinance lending and rural banking. The acquisition deal is an all-share deal, which means that there will not be any cash transactions. The deal is valued at 155 billion rupees ($2.4 billion). As per the acquisition deal, the shareholders of BFI will get 639 of IndusInd Bank’s shares for every 1000 of BFI shares. The closing stock price of BFI was Rs 1,004 on Friday, but as per the deal, the value of BFI’s shares has been kept at Rs 1118.47 per share. This translates into a premium of around 11 percent, which would be profitable for BFI shareholders.
Speaking about the acquisition, IndusInd Chief Executive Romesh Sobti said that the deal will allow IndusInd Bank to build upon the strengths of BFI. The deal would allow the bank to gain a slew of synergistic advantages. BFI has a large network across rural India, which can be leveraged to acquire new customers and offer banking services. According to financial analysts, the deal would allow IndusInd Bank to make significant gains in the microfinance industry. It will allow the bank to boost its revenue in the next few years. BFI has 6.8 million borrowers across more than 100,000 Indian villages, which would be a huge asset for IndusInd Bank.