BharatPe parent to sell up to 25% stake in Unity SFB for $800 million

Resilient Innovations, the parent company of BharatPe, is scouting for investors to sell up to 25 per cent of its 49 per cent stake in Unity Small Finance Bank (Unity SFB).

 

With this, it is aiming to raise anywhere around $800 million, said sources aware of the development.

 

The move is in line with regulatory requirements to reduce its holding in the bank to 10 per cent by 2029, irrespective of the listing of Unity SFB, said sources aware of the development.

 

According to the licensing requirements, BharatPe has to bring down its stake in the bank to 10 per cent within eight years from the bank’s operations.

 

Reports have suggested that the fintech major has hired Rothschild & Co. to help it find suitable buyers for the stake sale.

 

The fintech major will continue its association with the bank post the stake sale as this is a planned divestment due to regulatory requirements, which has been in the works for some time now, sources said.

 

Unity SFB is promoted by Centrum Financial Services and fintech BharatPe's parent, Resilient Innovations Pvt Ltd (RIPL) is an investor. Centrum Financial Services was granted a small finance Bank licence by the Reserve Bank of India (RBI) in November 2021.

 

Centrum group’s lending businesses, housed under Centrum Financial Services and Centrum Microcredit, were transferred to Unity SFB through a business transfer agreement. In January 2022, the Ministry of Finance proposed a scheme of amalgamation of the erstwhile PMC Bank with Unity SFB. Following this, Unity SFB was granted scheduled commercial bank status in April 2022.

 

SFBs are mandated to go public according to the Reserve Bank of India’s (RBI’s) requirements after five years of commencing operations.

 

However, the regulator had granted more time to Unity for public offering.

 

Unity SFB started operations on November 1, 2021. BharatPe is looking to divest a sizable chunk in the bank before the bank goes for a listing, sources said.

 

Unity SFB is a digital first bank with a business model of collaboration and open architecture. 

 

Unity SFB reported a 36 per cent rise in its profit to Rs 187 crore in the second quarter ended September 2024. The lender had earned a net profit of Rs 138 crore in the same quarter in the previous financial year.

 

Its total income increased to Rs 640 crore during the quarter under review against Rs 361 crore in the same quarter last year. Its net interest income grew to Rs 320 crore in FY25 from Rs 232 crore in FY24.

 

BharatPe, founded in 2018, is a fintech major which offers payments and financial services. The company is backed by marquee investors such as Tiger Global, Dragoneer Investment Group, Steadfast Capital, Coatue Management, Ribbit Capital, Insight Partners, Steadview Capital, Beenext, Amplo, and Sequoia Capital (now Peak XV Partners).

 

BharatPe recorded consolidated earnings before interest, taxes, depreciation, and amortisation (Ebitda) loss to Rs 209 crore in financial year 2024 (FY24), down from Rs 826 crore in FY23. In October, the company announced the launch of its new investment platform, Invest BharatPe, launching digital gold as the first product on the application. 

 

In August, it launched its UPI TPAP (third-party application provider) to facilitate consumer digital payments. Earlier, BharatPe provided merchant-to-merchant digital payment services.