Bharat Financial Eyeing At Merger, Acquisition After Incurring Massive Losses

The personal credit institutions company, Bharat Financial Inclusion, reported a net loss of Rs 235 crore for Q4FY17 in the announcement of its quarterly results on May 1, 2017, besides confirming the buzz that the company is considering merger or acquisition.      

According to the market sources, the microfinance institution is in talks with IndusInd Bank for the merger of its operation.

Whereas, by foregoing the opportunity to convert into small finance banks unlike its competitors Equitas and Ujjivan who converted into SFBs, Bharat Financial lost the opportunity to tap into low-cost deposit funds. However, the present rate of 8.8 per cent cost of borrowing is among the best in the sector, with 64 per cent dependence on term loans, borrowing costs can be brought down further with access to low-cost deposits.    

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