A number of venture investors and startups are engaging with Bank of Baroda to acquire a stake in the lender’s subsidiary Nainital, according to people familiar with the matter.
Premji Invest and stock broking giant Zerodha are among the prospective backers that have held conversations with Bank of Baroda, which has agreed to sell a significant stake in the subsidiary, the people said, requesting anonymity as the deliberations are private.
Private equity firm Multiples has also engaged with the lender, one person said.
Bank of Baroda, which owns over 98% stake in Nainital Bank, has been looking to divest its stake in Nainital Bank, which operates in five Indian states and has over 140 branches. The talks have reached serious deliberations in recent weeks.
Bank of Baroda, the second largest PSU bank in India, plans to initially divest about 40 to 50% stake in Nainital Bank and eventually sell the remaining shares, another person familiar with the matter said. A consortium of multiple entities is likely to win the bid, one of the people said.
A deal hadn’t been reached at the time of publishing, and existing prospective investors may still not end up forging the investment, people familiar with the situation cautioned.
Bank of Baroda, Multiples, and Premji Invest didn’t respond to a request for comment. Zerodha declined to comment.
The investment talks come as the Reserve Bank of India evaluates permitting external investors back a handful of lenders. Accel and Quona last year backed Shivalik Bank and fintech unicorn Slice said this week that it had received the approval from the central bank to merge with North East Small Finance Bank.
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