The Oman India Joint Investment Fund II (OIJIF II) successfully divested a 3.65 per cent stake in Capital Small Finance Bank through a block deal on June 9, 2026. The transaction, valued at approximately ₹37 crore, saw the private equity fund sell over 1.36 million shares to the Lyptus Punch-Card Fund. This move marks a partial exit for the fund, which was jointly established by the State Bank of India and the Oman Investment Authority.
Details of the Stake Divestment
The sale was executed at an average price of ₹270 per share on the National Stock Exchange (NSE). Before this divestment, OIJIF II held a 5.53 per cent stake in the bank, totaling 2,510,186 shares. Following the transaction, the fund’s remaining holding has reduced to approximately 1.88 per cent.
The entire block of shares was picked up by the Lyptus Punch-Card Fund. This transaction followed the bank’s strong financial performance in the fourth quarter of the 2025 to 2026 fiscal year, where it reported a 17 per cent increase in net profit to ₹40.08 crore. The bank also saw a 17 per cent growth in its net interest income, which reached ₹121 crore during the same period.
| Transaction Parameter | Details |
|---|---|
| Stake Sold | 3.65% |
| Number of Shares Sold | 1,362,563 |
| Average Sale Price | ₹270 per share |
| Total Transaction Value | Approximately ₹37 crore |
| OIJIF II Remaining Stake | 1.88% |
The Partnership: SBI and Oman Investment Authority
The Oman India Joint Investment Fund II is a strategic investment vehicle that represents the strengthening economic ties between India and Oman. It is a mid-market private equity fund co-sponsored by the State Bank of India (SBI), the largest public sector bank in India, and the Oman Investment Authority (OIA). The OIA is the sovereign wealth fund of the Sultanate of Oman, which was formerly known as the State General Reserve Fund.
OIJIF II was launched with a target corpus of $300 million, following the success of the initial $100 million OIJIF I. The fund focuses on providing growth capital to promising mid-sized Indian companies across diverse sectors, including financial services, healthcare, and niche manufacturing. The fund’s investment in Capital Small Finance Bank dates back to November 2019, when it initially acquired a 9.9 per cent stake for ₹84 crore.
India’s First Small Finance Bank: Capital SFB
Capital Small Finance Bank, headquartered in Jalandhar, Punjab, holds the distinction of being India’s first operational Small Finance Bank. It commenced its banking operations on April 24, 2016, after receiving its license from the Reserve Bank of India (RBI). Before its transition to a Small Finance Bank, it operated as the Capital Local Area Bank, which was established in 1999 and began operations in 2000.
For nearly sixteen years, it served as the largest local area bank in the country, focusing primarily on the agrarian and middle-income segments in North India. The bank reached another significant milestone on February 14, 2024, when it officially listed its shares on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). Today, the bank has expanded its presence across several states, including Punjab, Haryana, Rajasthan, and Delhi, continuing its focus on financial inclusion for small businesses and farmers.
The Regulatory Framework of Small Finance Banks
Small Finance Banks (SFBs) are a specific category of banks established in India to promote financial inclusion by providing basic banking services to underserved and unserved sections of the population. These sections include small business units, small and marginal farmers, micro and small industries, and entities in the unorganized sector. The establishment of SFBs was based on the recommendations of the Nachiket Mor Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households.
SFBs are required to follow several strict regulatory guidelines set by the Reserve Bank of India. For instance, they must extend 75 per cent of their adjusted net bank credit to the Priority Sector, which is significantly higher than the 40 per cent requirement for universal banks. Additionally, at least 50 per cent of their loan portfolio must consist of loans and advances of up to ₹25 lakh. Like other scheduled commercial banks, SFBs must also maintain the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) as mandated by the central bank.
Strategic Significance of the Exit
The partial exit of OIJIF II from Capital Small Finance Bank is seen as a routine move within the lifecycle of a private equity fund. Such funds typically operate for a fixed period, during which they invest in high-growth companies and later exit to provide liquidity to their investors. The fund’s initial investment of ₹84 crore has grown significantly over the years, reflecting the bank’s expansion and its successful listing on the stock exchanges.
Moreover, the OIJIF initiative continues to be a cornerstone of the bilateral relationship between India and Oman. Following the success of the first two funds, a third fund, OIJIF III, was established with a target size of $250 million. This ongoing partnership underscores the long-term commitment of the State Bank of India and the Oman Investment Authority to foster industrial and financial growth in the Indian market.
Key Takeaways
- The Oman India Joint Investment Fund II (OIJIF II) divested a 3.65 per cent stake in Capital Small Finance Bank for approximately ₹37 crore on June 9, 2026.
- The shares were acquired by the Lyptus Punch-Card Fund at an average price of ₹270 per share through a block deal on the National Stock Exchange.
- Capital Small Finance Bank, headquartered in Jalandhar, Punjab, was India’s first operational Small Finance Bank, starting operations in April 2016.
- OIJIF II is a mid-market private equity fund co-sponsored by the State Bank of India and the Oman Investment Authority (OIA).
- Small Finance Banks were established based on the recommendations of the Nachiket Mor Committee to promote financial inclusion.
- SFBs are mandated by the Reserve Bank of India to extend 75 per cent of their adjusted net bank credit to the Priority Sector.
