Private equity fund supported by SMBC acquires 4.99% equity in Shivalik Small Finance Bank, estimating bank's worth at 1,200 crores (Indian rupees)
Shivalik Small Finance Bank Raises ₹100 Crore, Eyes Growth and Acquisitions
Shivalik Small Finance Bank has successfully raised ₹100 crore in its latest equity round, led by SMBC Asia Rising Fund. The investment values the bank at approximately ₹1,200 crore, according to sources. This fresh capital will significantly boost the bank's capital adequacy ratio from 19% to 24%.
The existing investors, including Accel, Quona, Lightspeed, and Sorin Investments, have also participated in this round, contributing a combined Rs 40 crore on a pro-rata basis. Additionally, SMBC Asia Rising Fund, a corporate venture capital fund co-founded by Japan's Sumitomo Mitsui Banking Corporation, has acquired a 4.99% stake in Shivalik Small Finance Bank.
The bank's Managing Director and CEO, Anshul Swami, stated that the fresh equity will be used for growth purposes. He further explained that the funds will be utilized to strengthen the bank's technology, product, and operations teams, as well as to expand its workforce across product, engineering, and operations functions.
The bank aims to use the raised capital to build a strong digital foundation to serve MSME and retail customers across India. This strategy is part of Shivalik Small Finance Bank's commitment to serving India's underserved segments, particularly in semi-urban and rural areas, with a strong digital-first approach.
In terms of growth, the bank has set a target of 35-40% for this fiscal year. Moreover, the bank's management is considering acquisitions to accelerate expansion. Specifically, Shivalik Small Finance Bank is open to acquiring small entities in the affordable housing finance space or in the secured MSME lending space. However, as of now, there are no concrete acquisition deals under consideration.
It is worth noting that Shivalik Small Finance Bank is the only small finance bank in India to have evolved from a cooperative entity. This unique background, combined with its focus on digital innovation, positions the bank well for growth in the competitive financial services market.
The bank is not listed on the stock exchanges, but its strategic moves and investments suggest a commitment to growth and innovation in the Indian financial sector.
Meanwhile, the Reserve Bank of India (RBI) has cleared Paytm Payments Services to operate as an online payment aggregator, lifting the ban on new merchant onboarding. This move is expected to boost the digital payments sector in India, providing more opportunities for players like Shivalik Small Finance Bank to expand their digital offerings.
[1] Strengthening technology infrastructure and expanding workforce [2] Developing scalable solutions through banking-as-a-service (BaaS) offering [3] Serving India's underserved MSME and retail segments across semi-urban and rural areas with a strong digital-first approach [4] Open to acquiring small entities to accelerate growth [5] Considering acquisitions in the affordable housing finance space or secured MSME lending space [6] Targeted business growth for this fiscal is 35-40% [7] Shivalik Small Finance Bank is the only small finance bank in India to have evolved from a cooperative entity [8] SMBC Asia Rising Fund's sixth investment in India is the investment in Shivalik Small Finance Bank [9] The bank plans to use the fresh capital to build a strong digital foundation to serve MSME and retail customers across India [10] The bank intends to expand its workforce across product, engineering, and operations functions [11] The RBI has cleared Paytm Payments Services to operate as an online payment aggregator, lifting the ban on new merchant onboarding
- The fresh equity in Shivalik Small Finance Bank will be utilized to strengthen its technology infrastructure and expand the workforce.
- Shivalik Small Finance Bank aims to develop scalable solutions through a banking-as-a-service (BaaS) offering.
- The bank intends to serve India's underserved MSME and retail segments across semi-urban and rural areas with a strong digital-first approach.
- Shivalik Small Finance Bank is open to acquiring small entities in the affordable housing finance space or in the secured MSME lending space to accelerate expansion.
- The bank's targeted business growth for this fiscal is 35-40%.
- Shivalik Small Finance Bank is the only small finance bank in India to have evolved from a cooperative entity.
- SMBC Asia Rising Fund's sixth investment in India is the investment in Shivalik Small Finance Bank.
- The bank plans to use the fresh capital to build a strong digital foundation to serve MSME and retail customers across India.
- The bank intends to expand its workforce across product, engineering, and operations functions with the new funds.
- The Reserve Bank of India (RBI) has cleared Paytm Payments Services to operate as an online payment aggregator, lifting the ban on new merchant onboarding, which is expected to boost the digital payments sector in India, providing more opportunities for players like Shivalik Small Finance Bank to expand their digital offerings.
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