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India's largest private sector lender HDFC Bank Ltd. has acquired a minority stake in fintech start-up Mintoak for a cash consideration of Rs 31.1 crore.

The bank will subscribe to 21,471 fully paid up Compulsory Convertible Preference Shares (CCPS) of face value of Rs 20 each at a premium of Rs 9,711, taking the total consideration to Rs 9,731 per CCPS. It will also purchase 10,538 fully paid-up equity shares of Mintoak for a consideration of Rs 9,731 per share from certain existing shareholders of Mintoak.

Post the transaction, HDFC Bank will hold 7.75 percent stake in Mintoak.

Mintoak is a fintech start-up that provides a payments-led platform offering value added services to merchants to engage with their customers and for acquirers to enhance their engagement with merchants through digital engagements.

Investing in a growing fintech startup that offers payments and value-added services to its merchants and enhances the digital engagement of acquirers with merchants is cited as the rationale behind this move.

Agreements for the same were signed on December 13, according to the lender.

For the financial year ending March 31, 2022, Mintoak had a turnover of Rs 11.28 crore and net profit of Rs 1.47 crore.

HDFC Bank and its subsidiaries in the normal course of business may have business dealings at an arm's length.

The deal is likely to be completed by January 31, 2023, subject to conditions precedent. As the overall stake of the bank post the transaction will be less than 10 percent, this will not require regulatory approval.

In other news for HDFC Bank, the lender received in-principle approval from both BSE and NSE for the merger with HDFC.

Last month, the lender said that the merger will take another 8-10 months before an effective date is announced. The HDFC-HDFC Bank merger is billed as the largest merger in Indian corporate history at over $40 billion.

First Published:Dec 14, 2022 9:04 AM IST