Shivalik has received Reserve Bank of India‘s (RBI) approval for this acquisition while it has sought clearance from the Registrar of Companies. The deal comprises share swaps and a cash payment, people familiar with the matter said.
“The strategic rationale for the acquisition is to strengthen Shivalik’s presence in the affordable housing segment, support financial inclusion objectives, expand secured lending and gain complementary geographic reach in North India,” a Shivalik Bank spokesperson said.
The bank has been exploring this inorganic route over the past one year. ET in its March 30, 2025 edition first highlighted that Shivalik’s was looking to acquire a mid-sized housing finance company.
The bank bolstered its capital in August last year when SMBC Asia Rising Fund, a venture capital fund co-founded by SMBC and Incubate Fund, bought a 4.99% stake in Shivalik for about ₹60 crore. Existing investors Accel, Quona, Lightspeed and Sorin Investments also put in another ₹40 crore between them on a pro-rata basis, taking the total equity raise to ₹100 crore. Shivalik’s total loan book stood at ₹3,659 crore at the end of December last year, driven primarily by housing loans, followed by vehicle and gold loans.
The portfolio includes ₹370 crore of housing loans. The company is yet to announce its March financial numbers. ManiBhavnam Home Finance has a loan book of around ₹300 crore.
Shivalik, the only small finance bank to have transformed from a urban cooperative bank, follows a predominantly secured lending model, with about 90% of its loan book backed by collateral such as property, gold, and agricultural commodities. Microfinance constitutes less than 10% of the overall portfolio and is covered under the credit guarantee scheme, the bank official said.
The deal will allow Shivalik to get a foothold in the country’s affordable housing finance market, which is projected to expand at a 20% compounded annual growth rate till 2030.