Here are 5 things to know about this development:
1) IndusInd Bank is the sixth biggest private sector lender in India with a market value of over Rs 1 lakh crore. In FY17, retail banking contributed nearly 50 per cent to its total revenue and has grown by 20 per cent over FY16. In the absence of credit demand from corporate side, private lenders have increased focus on retail side, which is witnessing robust growth, analysts say.
2) Acquisition of Bharat Financial Inclusion will give further boost to its retail business, say analysts. "Of late (IndusInd Bank) has been talking about increasing the proportion of their consumer business. This deal would help it achieve that," said Nitin Aggarwal, an analyst with brokerage Antique Stockbroking.
3) Bharat Financial Inclusion is the largest microlender in India in the listed space with a market value of Rs 13,400 crore.
4) Credit Suisse said in a note last week Bharat Financial was one of the best-capitalised microfinance players in the market.
5) The two financial firms had long been speculated to be interested in a deal, with analysts saying previously it could come in the form of a share swap. (With agency inputs)