Kotak Mahindra Bank gets RBI nod to acquire ‘aggregate holding’ of up to 9.99% in AU Small Finance Bank

AU Small Finance Bank (SFB) on Thursday, 7 May, informed exchanges that leading private lender Kotak Mahindra Bank has received Reserve Bank of India's (RBI) nod to acquire up to 9.99% stake in the company.

AU SFB, in an exchange filing, informed that Kotak Mahindra Bank, along with its subsidiaries, the funds/schemes managed by them, and collectively referred to as Kotak Mahindra Group, have received the central bank's approval to acquire an ‘aggregate holding’ of up to 9.99% of the paid-up share capital or voting rights in AU SFB.

According to the March quarter shareholding pattern, Kotak Flexicap Fund holds 119,97,824 shares or a 1.60% stake in the lender. Several other major funds, such as HDFC MF, Nippon Life, Invesco, and DSP Midcap, also hold stakes in the lender, along with insurance firms such as SBI Life Insurance and HDFC Life Insurance.

Shares of AU Small Finance Bank traded flat following this announcement, down 0.3% at ₹1,021.30 apiece. Meanwhile, Kotak Bank's stock was higher by less than a per cent at ₹378.90 on the BSE.

AU SFB Q4 results

Last month, the small finance lender reported a profit of ₹832 crore, up 65% year-on-year (YoY) and 25% quarter-on-quarter (QoQ). Net interest income (NII) — the difference between interest earned and expended — grew by 23% YoY and 10% QoQ to ₹2,582 crore.

Net interest margin (NIM) expanded by 24 bps to 5.96% in Q4FY26 from 5.7% in Q3FY26, according to the company's press release.

The provisions during the quarter under review slipped 58% YoY and 19% QoQ to ₹269 crore. At the same time, asset quality ratios improve sequentially. The GNPA ratio came in at 2.03% in March compared with 2.30% in December 2025. Similarly, the NNPA ratio was at 0.74% as of March against 0.88% in December.

The total deposits during the quarter under review rose 23% YoY and 10% QoQ to ₹152,661 crore. Meanwhile, gross loan portfolio stood at ₹1,40,327 crore at the end of the March quarter, recording a YoY growth of 21% and a QoQ increase of 8%.

AU SFB share price trend

The share price performance of AU SFB has been strong over multiple time frames and better than the index. It has gained 2% on a year-to-date basis as against a 6% decline in Nifty 50. Meanwhile, AU SFB stock has jumped 49% in a year compared with a 2.5% increase seen in the benchmark index.

On a three-year basis, it is up 52%, and in five years, it has rallied 120%.