Capital First Ltd, a non-banking financial company in which private equity firm Warburg Pincus LLC has a stake, said it would raise Rs340 crore in fresh equity capital from an affiliate of Singapore’s sovereign wealth fund GIC Pte.
Shares will be allotted on a preferential basis at Rs712.7 per share to Caladium Investment Pvt. Ltd. The company will allot 4.78 million shares to Caladium, Capital First said in a statement on Friday.
Capital First’s stock closed at Rs539.35 per share on the BSE, down 7.33%.
Capital First focuses on MSME (micro, small and medium enterprises) and consumer financing. It offers loans for buying homes, two wheelers and consumer durables, as well as loans against property, to entry and mid-level salaried employees of corporate entities and to self-employed individuals.
The company said as of 30 September, it had financed more than 3 million customers.
After the transaction, total capital (including Tier 1 and Tier 2) will increase to Rs 3,263 crore on a consolidated basis, Capital First said.
“This reaffirms the strong institution built at Capital First over the years in the Indian financial services space. Post this transaction, the capital adequacy ratio will increase from 19.1% to 21.6%, which will help the company to continue its future growth plans on a strong capital base,” said founder and chairman V Vaidyanathan.
For the quarter ended 30 September, Capital First reported a profit of Rs57.6 crore, a 40% increase from Rs41.0 crore a year earlier and its highest ever quarterly profit.
Capital First’s assets under management (AUM) had grown 32% to Rs 17,937 crore as on 30 September, with the retail loan portfolio contributing 90.1% of the overall AUM.
Gross non-performing assets (NPA) and net NPAs stood at 0.98% and 0.45% respectively as on 30 September.
Warburg Pincus had acquired a 42.73% stake in Capital First from Pantaloon Retail in 2012 and subsequently bought an additional 24.43% in the company through an open offer in October that year.