TVS Group to acquire 9.99% stake in Jana Small Finance Bank through preferential issue

The TVS Group is set to acquire a 9.99% stake in Jana Small Finance Bank through a preferential issue, according to a CNBC-TV18 report on May 14. The transaction is expected to be valued at around Rs 450 crore to Rs 500 crore.

The development marks a significant move by one of India’s major industrial groups into the small finance banking space. Jana Small Finance Bank’s board is scheduled to consider the fundraise proposal at its meeting on May 18. After board approval, the proposal will be sent to the Reserve Bank of India for regulatory clearance.

The proposed stake size of 9.99% is important from a regulatory perspective. The RBI caps corporate shareholding in banks at 10% for non-financial entities. By keeping the stake just below the 10% threshold, the TVS Group can acquire a meaningful financial stake in Jana Small Finance Bank without crossing the regulatory ceiling applicable to corporate investors.

Jana Small Finance Bank reported a Capital to Risk-weighted Assets Ratio of 19.4% for FY26, which is above the RBI’s minimum requirement of 15% for small finance banks. Despite the healthy capital adequacy position, the proposed fundraise is expected to strengthen the bank’s balance sheet further and support its future growth plans.

CNBC-TV18 had earlier reported on May 6 that Jana Small Finance Bank was exploring a fundraise. The latest development identifies the TVS Group as the strategic investor.

For the TVS Group, the investment represents an entry into the banking space through a minority stake. The group already has presence across automotive manufacturing, financial services and logistics. A stake in Jana Small Finance Bank gives the group exposure to India’s formal credit market, especially the underserved customer segments that small finance banks typically focus on.

The investment amount of around Rs 450 crore to Rs 500 crore is a strategic financial commitment and will be subject to regulatory approval after the Jana Small Finance Bank board reviews the proposal.

CNBC-TV18 said it was awaiting responses from both Jana Small Finance Bank and TVS Group at the time of publication.

This remains a developing story, with further updates expected after the May 18 board meeting and the subsequent RBI approval process.

Disclaimer: This article is based on CNBC-TV18 reporting. The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Fingo does not hold any position in the securities mentioned.