Bank of Baroda board on Thursday approved divestment of up to 49% stake in BOB Financial Solutions Ltd, the bank said in an exchange filing.
BOB Financial Solutions, which was earlier known as BOBCards Ltd, is a wholly-owned subsidiary of Bank of Baroda, and is in the credit cards business.
It is one of the two standalone non-banking finance companies allowed to issue credit cards by the Reserve Bank of India.
"BOB (Bank of Baroda) intends to divest up to 49% in a combination of primary and secondary capital from one or multiple investors, in order for the incoming investors to create more value in BFSL (BOB Financial Solutions) and take it to the next level of growth", the bank said in a notice on its website.
The state-owned lender did not disclose the floor price for the sale of stake. The last date for submission of expressions-of-interest is Apr 10.
The bank has appointed ICICI Securities as transaction adviser.
In May 2022, Informist had reported that Bank of Baroda is open to bring in a partner for its subsidiary BOB Financial Solutions, not to provide capital, but to leverage on their distribution or technology strengths.
Any company with net worth of at least ₹5.00 bln or any private equity fund vehicle having assets under management of at least $1 bln or equivalent as on Dec 31 are eligible to bid either as a sole party or as part of a consortium, according to the notice.
As on Jan 30, Bank of Baroda's outstanding credit cards stood at 1.82 mln and added 72,115 credit cards in January, according to latest data released by the RBI.
BOB Financial Solutions reported a total income of ₹5 bln for 2021-22 (Apr-Mar) and loss of 100 mln rupees.
Shares of Bank of Baroda were 1.5% lower at ₹169.15 on NSE, at 09:16 IST.
