BharatPe to Sell 25% Stake in Unity Small Finance Bank

India’s leading fintech company BharatPe is planning to sell up to 25% of its 49% stake in Unity Small Finance Bank (Unity Bank). The move is aimed at raising around $800 million (approximately Rs 6,500 crore) and is part of the company’s plan to meet RBI’s regulatory requirements. BharatPe, a major player in the digital payments and financial services sector, has appointed Rothschild & Co to oversee the stake sale.

Key Highlights

Stake Sale

• BharatPe plans to sell up to 25% of its 49% stake in Unity Bank.
• The company aims to raise approximately $800 million (Rs 6,500 crore) through this stake sale.

Regulatory Compliance

• The Reserve Bank of India (RBI) mandates that BharatPe’s parent company, Resilient Innovation Private Limited, reduce its stake in Unity Bank to 10% by 2029.
• BharatPe has appointed Rothschild & Co to facilitate the stake sale.

Unity Small Finance Bank Establishment and Progress

• Unity Bank was established in November 2021 through a collaboration between Centrum Financial Services and BharatPe.
• The bank gained recognition for successfully acquiring PMC Bank shortly after its launch.
• In September 2024, Unity Bank reported a net profit of Rs 187 crore, up from Rs 138 crore in the previous year.
• The bank’s total income grew by 77% to reach Rs 640 crore in the same quarter.

Digital First Banking Model

• Unity Bank follows a digital-first model offering a seamless banking experience through open architecture and partnered business models.
• It focuses on providing digital banking services to both small businesses and consumers.

BharatPe’s Background and Expansion Plans

• Founded in 2018, BharatPe has grown into a significant player in payments and financial services.
• Its investors include prominent names like Tiger Global, Sequoia Capital (now Peak 15 Partners), Dragoneer Investment Group, and Insight Partners.
• BharatPe aims to use the funds from the stake sale to strengthen its core financial services and develop new products.

Future Plans

• BharatPe sees the stake reduction as a way to meet regulatory requirements while also raising funds to expand its other business operations.
• The company aims to use the proceeds to further grow its financial services offerings and boost innovation in the fintech space.