IndusInd Bank announces merger deal with Bharat Financial

The Board of Directors of IndusInd Bank Ltd. and the Board of
Directors of Bharat Financial Inclusion Limited at their respective meetings held today, have approved a merger of the two entities to create a stronger and more sustainable platform for Financial Inclusion.

The merger will be effected through an all-stock transaction of Bharat Financial Inclusion Limited into IndusInd through a Composite Scheme of Arrangement (“Scheme”). The Scheme contemplates merger of Bharat Financial with IndusInd and simultaneous transfer of Bharat Financial Inclusion Limited’s
Business Correspondent operations into a Wholly Owned Subsidiary of IndusInd, which shall be incorporated after receipt of requisite regulatory approvals (“BC-WOS”). All the assets and liabilities originated by the BC-WOS will be booked in the Balance Sheet of IndusInd.

As an integral part of the Scheme, there shall be a preferential allotment of warrants to the Promoters of IndusInd in accordance with the applicable RBI and SEBI guidelines as an anti-dilutive measure.

The Scheme is subject to the approval of the Reserve Bank of India, the Competition Commission of India, the Securities and Exchange Board of India / Stock Exchange(s), shareholders and creditors of IndusInd and Bharat Financial Inclusion Limited, National Company Law Tribunal and such other
regulatory approvals as may be required.

Upon the Scheme becoming effective, Bharat Financial Inclusion Limited will stand merged into IndusInd and shareholders of Bharat Financial will receive shares of IndusInd in exchange for shares held by them in Bharat Financial as per the approved Fair Equity Share Exchange Ratio (“Swap Ratio”).

Bharat Financial Inclusion Limited’s shareholders will receive 639 shares of IndusInd forevery 1,000 shares of Bharat Financial Inclusion Limited. This implies a premium of 12.6% to Bharat Financial Inclusion Limited over two-week volume weighted price (VWAP).

The Merger is expected to be value accretive from inception given IndusInd Bank’s lower cost of funds, ability to monetize excess PSL qualifying assets, efficient capital utilization and optimal resource utilization. Bharat Financial Inclusion Limited’s distribution network also offers large untapped deposit
potential from rural and underserved customers as also for their emerging banking needs.

Romesh Sobti, MD and CEO of IndusInd Bank, said, “This
Merger is a natural progression of a long-standing relationship and mutual admiration between the two institutions. The combination brings together entities with significant complementary strengths and huge synergistic advantages, making it a win-win proposition for all stakeholders from inception.”

M.R. Rao, MD and CEO, Bharat Financial Inclusion Limited, said, “Access to savings, deposits and other financial products for all our 6.8 million customers completes our financial inclusion offering. With IndusInd we will have the advantage of deriving the benefit of a large universal bank from day 1. Our network, client base and last-mile customer access to 100,000 villages are unique. We are excited with
the possibilities the merger will bring.”