As the billionaire businessman looks to exit non-core businesses and conserve cash for his primary operations, private equity firms Bain Capital, Carlyle Group, and Cerberus Capital Management are expected to make binding offers to purchase Gautam Adani’s six-year-old shadow bank, Adani Capital, in the coming weeks, according to multiple people involved.
Around 10% of Adani Capital is owned by the management, which is headed by former Lehman Brothers and Macquarie investment banker Gaurav Gupta, who joined the business in 2016. Nearly 90% of the company, which is up for sale, is owned by the promoters.
Even if the current management team runs the company, the funders are considering a 100% buyout. Assets under management (AUM) total Rs 4,000 crore and book value is Rs 800 crore for the organization. Adani Group is estimated to be predicting 2-2.5 times the book value, or a valuation of Rs 2,000 crore.
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Expected Investment for Adani Capital:
According to the sources described above, the new investor will also make a primary investment of Rs 1,000–Rs 1,500 crore in the company as growth capital.
The promoters are anticipated to make a final decision about the retention of a modest interest for potential value increases based on the final valuation. The majority of bidders, though, are interested in acquiring the entire company.
According to Bloomberg’s July story stating managing director and chief executive Gupta, the company planned an IPO for the first quarter of 2024 to generate Rs 1,500 crore ($188 million), offering around 10% of the company at a target valuation of $2 billion. This was prior to the short-sellers attacking it in the latter part of January of this year.
According to the sources mentioned above, the shadow bank’s access to funds has been restricted because of its affiliation with the Adani Group because the majority of banks and lending groups are getting close to their group exposure restrictions. Avendus and Adani are now collaborating on the sale process.
Axis Bank, L&T Finance, IIFL Wealth, HDFC, Yes Bank, SBI Cards, and SBI Life Insurance are just a few of the insurance and card firms that Bain and Carlyle have invested in along with banks and NBFCs.
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