Kotak Securities Ltd. (KSL), a subsidiary of Kotak Mahindra Bank Ltd, has struck a definitive agreement to acquire a 7.50 percent stake in Entroq Technologies Pvt Ltd. (ETPL) for Rs 3 crore. The acquisition will be completed by issuing 100 equity shares and 10,568 cumulative compulsorily convertible preference shares (CCCPS) to KSL. The acquisition is slated to be completed by the end of December 2021.
Kotak Securities said in a stock exchange statement, “Kotak Securities Ltd., a subsidiary of Kotak Mahindra Bank Ltd., has entered into a definitive agreement with Entroq Technologies Private Limited (ETPL) dated December 17, 2021, for acquiring 7.50 percent in the total share capital of ETPL.”
According to Kotak Securities, the total cash consideration is “Rs 3 crore for a total 7.5 percent stake in ETPL’s share capital in the form of 100 equity shares for Rs 2,811.99 apiece and 10,568 CCCPS for Rs 2,811.99 each (with the face value of Rs 10 and premium of Rs 2,801.99 for both equity shares and CCCPS).”
Entroq, which was incorporated in October 2020, is a fintech startup that focuses on offering a short-curated financial news platform as well as a social community (Circles) for millennials and early-stage investors. Directors of Entroq include Bharat Bhushan, Dipankar Biswas, and Diptanil Das.
Kotak Securities has started its first Startup Investment and Engagement Programme in January. KSL aims to incubate and invest in innovative finance and technology startups with this initiative. Kotak Securities announced in January 2021 that it has formed an exclusive Corporate Development Department (CDD) for this program, with an upfront investment corpus of Rs 50 crore. It would develop incubation and accelerator programs, networking events, hackathons, pitching sessions, and demo day programs for early-stage startups in-house as well as in collaboration with other incubator or accelerator groups, under the initiative.
The fintech and investment tech businesses in India have seen tremendous growth in recent years, fueled partly by rising demand amid the covid pandemic. With an adoption rate of 87 percent, the country outperforms the global average of 64 percent. Fintech startups garnered $2.7 billion in funding during Q3 2021. The investment tech industry recorded around 18 percent, or 14 transactions, of the overall 79 fintech deals disclosed. In Q32021, the sector secured $200 million in funding. The year 2021 experienced massive growth in investments into the startup sector, as well as the highest number of unicorns, with 40 startups surpassing billion-dollar valuations.