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May 21, 2018

Temasek to acquire minority stake in India’s AU Small Finance Bank

Singapore-based investment firm Temasek has agreed to acquire nearly a 4.8% stake in India-based AU Small Finance Bank.

Under the terms of the agreement, Temasek’s an indirect wholly-owned subsidiary Camas Investments will invest INR10bn ($147m) in the Indian bank.

In return, AU Small Finance Bank will issue 4.33 million fully paid-up equity shares along with 10.10 million convertible warrants on preferential basis to Camas Investments.

Camas Investments shall be entitled to exercise any or all of the convertible warrants, in one or multiple tranches, within a period of one and half year from the date of allotment of convertible warrants.

The securities will be allotted at INR692.77 ($10.18) per equity share and the issue price of the convertible warrants will be the same.

The latest transaction marks the third India-related deal for Temasek. Earlier, the company backed German firm Schneider to buy L&T’s electrical and automation business unit in a $2.1bn deal and is expected to sign an investment in IT firm UST Global.

AU Small Finance Bank was one of the 10 NBFCs that secured approvals from the Reserve Bank of India (RBI) in September 2015 for setting up a small finance bank.

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