Interest in the Small Finance Bank (SFB) space is certainly on the rise. Global venture capital funds, Accel Partners and Quona Capital are set to increase their stake in Shivalik Small Finance Bank to 9.99 per cent each.
Presently both VCs hold a 4.99 per cent stake each in the bank. Highly placed sources say both investors have approached the Reserve Bank of India to increase their shareholding in the bank and are awaiting final approval from the regulator.
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“With the investors increasing their stake to nearly 10 per cent in the bank, each will have a nominee director on the bank’s board,” said a person aware of the matter.
In terms of valuations, the increase in stake may happen near the asking price of the previous funding round. In November 2022, Accel Partners and Quona Capital infused ₹111 crore in the bank for a 4.99 per cent stake each. The bank was then valued at ₹560 crore. “This round of funding may be similar to the last round,” said another source aware of the matter.
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Shivalik SFB did not want to comment on the fundraise development.
With a balance sheet size of approximately ₹3,300 crore in FY23, Shivalik SFB is the latest addition to the SFB fraternity. In January 2020, the bank received in-principle approval from the RBI to convert from an urban cooperative bank into a small finance bank. The bank commenced its operations as SFB on April 26, 2021 and its net worth stood at around ₹160 crore as of March 31, 2023. Headed by Anshul Swami as MD and CEO, a former old hand at RBL Bank, this round of capital infusion would help the bank meet the ₹200 crore minimum net worth threshold well in advance of the 5-year grandfathering period.