Investech unicorn Zerodha is reportedly among the several venture investors and startups that are looking to acquire a stake in Bank of Baroda’s subsidiary Nainital Bank.
The prospective buyers, which include Zerodha, PE firm Multiples, and Premji Invest, have held talks with Bank of Baroda, which has agreed to sell a significant stake in its subsidiary, TechCrunch reported.
Zerodha declined to comment on the development.
Bank of Baroda owns over 98% stake in Nainital Bank and has been looking to divest some of its stake in the bank.
Nainital Bank was established in 1922. In 1973, the Reserve Bank of India (RBI) directed Bank of Baroda to manage the affairs of the bank. Currently, the Bank of Baroda subsidiary operates in five Indian states and has more than 140 branches.
As per the publication, the talks for divestment have reached serious deliberations in recent weeks.
Bank of Baroda plans to initially divest about 40-50% stake in Nainital Bank and eventually sell the remaining stake, the report said.
A consortium of multiple entities is likely to win the bid.
The development comes days after fintech unicorn slice said it has received the RBI’s nod for its proposed merger with North East Small Finance Bank.
Two high-profile venture investors told the publication that VCs and PEs are hunting for deals with banks partly as a hedge against their fintech investments on the back of growing regulatory scrutiny on fintech firms.
Meanwhile, Zerodha continues to diversify its business. It recently tied up with smallcase for the launch of an asset management company.
Recently, Zerodha founders Nithin Kamath and Nikhil Kamath also increased their stake in online gaming major Nazara Technologies.
The broking platform is currently valued at about $3.6 Bn.
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