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  3. Potential merger between AU Small Finance and Fincare SFB: What’s at st…

Potential merger between AU Small Finance and Fincare SFB: What’s at stake for investors?

13 Sept 2023

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Key Takeaways

  • The acquisition will lead to increased operations due to increased resources, customer base, geographical presence for AU Small Finance Bank.

  • The rise in operations will lead to increase in revenue & profitability, with the anticipation of higher returns to shareholders.

  • The acquisition will lead to increased operations due to increased resources, customer base, geographical presence for AU Small Finance Bank.

  • The rise in operations will lead to increase in revenue & profitability, with the anticipation of higher returns to shareholders.

Fincare Small Finance Bank Unlisted Shares

Fincare Small Finance Bank

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Expert Analysis

AU Small Finance bank is in talks to acquire Fincare Small Finance Bank, making it the first deal in the small finance bank space, symbolizing consolidation in the industry. 


  • AU Small Finance bank with a loan book value of ₹58,421 crore (as of March 31, 2023) is planning to acquire Fincare Small Finance Bank attributed to higher profitability & yields resulting due to unsecured loans & flexible pricing.

  • Another valid reason to acquire is the target’s strong presence in southern markets, which will aid the acquirer to diversify its geographical risk & tap into better asset quality.

  • The consolidation might lead to stock dilution for AU’s shareholders, but the long term positive effects will outweigh short-term investor concerns.

Publisher:businessline