According to The Economic Times, Adani Capital, the shadow banking division of Gautam Adani’s conglomerate, is being purchased by global private equity company Bain Capital for a price of Rs 1,500 crore.
In-depth details about Adani Capital may be acquired by Bain Capital for Rs 1500 crore
As Adani seeks to refocus his business holdings and concentrate on core infrastructure while preserving cash, individuals with firsthand knowledge of the situation claim that Bain Capital has eclipsed Carlyle to become the frontrunner in the acquisition process.
Gaurav Gupta, a former investment banker for Lehman Brothers and Macquarie who joined the group in 2016, is the head of Adani Capital, a company that has been operating for seven years. Gupta and the rest of the management team own about 10% of the business, while Gautam Adani owns over 90%.
Three private equity firms, including Bain Capital, Carlyle, and Cerberus Capital Management, have expressed interest in purchasing Adani Capital during the previous few months.
Adani Capital reported assets under management at Rs 3,977 crore as of the end of the fiscal year 2023, an increase of 63% from the previous year, with a book value estimated at Rs 800 crore.
Bain Capital is anticipated to pay Rs 1,500 crore for the acquisition, which is twice the book value, and to add an additional Rs 500 crore as primary capital for future expansion.
Although it is anticipated that Gautam Adani will sell his stock, it is yet unknown whether the current management team will keep a minority stake and continue to run the business.
Adani Capital reported gross outlays of Rs 2,482 crore, total revenues of Rs 599 crore, and an after-tax profit of Rs 105 crore in FY23.
According to a story by The Economic Times, both Bain Capital and the Adani Group declined to comment on the situation, and Gaurav Gupta did not reply to emails asking for clarity.
According to sources with knowledge of the situation, Adani Capital has encountered restrictions on capital flow as a result of its affiliation with the Adani Group, since various banks and lending organizations are getting close to their exposure limits to the conglomerate.
Adani is collaborating with the financial services company Avendus to make the sale process easier.
The agriculture industry is Adani Capital’s largest vertical in terms of assets under management, and it is one of six sectors across which it provides retail and wholesale loans.