HDFC Bank picks up 7.75% stake in fintech startup Mintoak for Rs 31 crore

India’s largest private bank HDFC Bank has bought a 7.75 percent stake in fintech startup Mintoak for Rs 31 crore, it said in a regulatory filing on Wednesday. As per the details, HDFC Bank signed an agreement on December 13, 2022, following which it will subscribe for 21,471 fully paid Compulsory Convertible Preference Shares (CCPS) of Rs 20 each at a premium of Rs 9,711. The total consideration will be Rs 9,731 per CCPS.

The regulatory filing stated that the private bank will also buy 10,538 fully paid up shares of Mintoak for a consideration of Rs 9,731 per share from certain existing shareholders of Mintoak.

Mintoak is a fintech startup that offers a payment-driven platform with many value-added services so that merchants can connect with their customers. For buyers, Mintoak improves their engagement with sellers through its digital offerings. As per the details filed with the Securities and Exchange Board of India (Sebi), Mintoak’s turnover (operating income) was Rs. 11.28 crore and PAT was Rs. 1.47 crore for the year ended 31 March 2022. Mintoak was incorporated in 2017.

The acquisition agreement will probably be completed by 31 January 2023, which will depend on the conditions. Since the bank’s total shareholding after the transaction will be less than 10 per cent, this will not require regulatory (Sebis) approval. The bank said it invested in a growing fintech startup that offers payments and value-added services to its merchants and improves the digital engagement of acquirers with merchants to make the digital payment platform available.

In 2021, HDFC Bank invested Rs 10.3 crore in Mintoak and acquired 5.3 percent stake in the company on a fully diluted basis.

In October this year, HDFC Bank launched its SmartHub Vyapar Merchant app, which was co-developed with Mintoak. The SmartHub Vyapar Merchant app is a payment and banking solution for SMEs, enabling merchants to accept interoperable payments across multiple payment methods that include cards, UPI and QR codes. The bank claims to add more than 75,000 merchants every month.

For sellers who are not interested in technology and related operations, the app offers an option to send a payment link on mobile or email to facilitate a non-face-to-face acquisition.

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