BharatPe taps Rothschild to sell stake in Unity SFB

Non-banking financial company (NBFC) BharatPe has tapped investment bank Rothschild and Co. to scout for buyers for its stake of anywhere between 10% and 25% in Unity Small Finance Bank (SFB), Mint reported, citing people aware of the development.

The Peak XV-backed fintech firm, which owns about 49% in the small finance bank, needs to bring down its stake in Unity SFB to 10% by 2028.

An SFB is a type of bank licensed by RBI to serve underbanked and underserved sections, including small businesses, micro-enterprises, and rural areas.

These offer basic banking services such as accepting deposits, providing loans, and offering financial products, but focus on financial inclusion by catering to sectors not fully covered by larger commercial banks.

Unity SFB, which is backed by Centrum and BhratPe’s parent Resilient Innovations Pvt. Ltd, has completed three years of operations and is required to go public after two more years.

Reserve Bank of India (RBI) rules stipulate that no single stakeholder can own more than a 10% stake before a financial entity like Unity SFB goes for public listing.

BhartPe, whose 49% stake in the small finance bank is valued at about $900 million, too, is preparing for an initial public offering (IPO), Mint reported in August 2022.

BharatPe turned Ebitda positive last October and posted consolidated revenue from operations of ₹1,426 crore in FY24 against ₹1,029 crore a year ago.

Ebitda, or earnings before interest, taxes, depreciation and amortization is a measure of profitability.