Mumbai: New Silk Route (NSR) is in talks with private equity (PE) firms Baring Asia and General Atlantic LLC, along with strategic investors, to sell its stake in Destimoney Enterprises Pvt. Ltd, multiple people close to the development said.

“We would look at the best for the company. It’s a perfectly aligned, stable team. We are open to any long-term partner, be it a PE firm or a strategic partner," said Parag Saxena, founding general partner and chief executive officer of New Silk Route. He declined to name the investors that are currently in talks with NSR for the stake sale.

NSR is looking at exiting its six-year-old investment in Destimoney and is expecting a valuation of more than 1,200 crore, a sixfold gain over its investment of 200 crore, said one of the person cited above, who did not wants to be identified.

Destimoney also has a 49% stake in PNB Housing Finance Ltd.

In 2008, when NSR invested in Destimoney Enterprises, PNB Housing Finance had a loan book of about 2,000 crore. As on 31 December 2013, PNB Housing Finance’s loan book stood at 9,448 crore.

Destimoney is a retail financial services and distribution company wholly-owned by NSR. The firm was founded as a joint venture with Dawnay Day International, the financial services unit of UK-based Dawnay Day Group in 2005.

“Marquee investors like Baring Asia and General Atlantic are keen on buying out NSR’s stake in Destimoney. The firms are keen on Destimoney due to the large home loan book the firm has with PNB Housing Finance," said another person familiar with the development.

He said Baring Asia will soon have to exit its investments in financial services space, since they have been invested in these firms for more than five years.

The PE firm has two investments in the financial services space. In 2008, the PE firm invested about 240 crore in Sharekhan Ltd, a broking firm. In 2007, NSR also invested about 500 crore, along with ICICI Ventures, in Karvy Stock Broking Ltd.

Baring Asia and Destimoney declined to comment. An e-mail and a text message sent to Sandeep Naik, managing director, General Atlantic India. did not elicit any response.

On 19 February, The Economic Times reported that NSR is looking to exit its investment in Destimoney.

Investment Bank Morgan Stanley will advice NSR on the transaction, people mentioned above said.

NSR said it is in no hurry to exit.

“The exit will be opportunistic. A couple of companies have approached and we mandated an investment bank to facilitate the price discovery mechanism," said Saxena. “In fact, the PE firm is ready to infuse more capital to Destimoney, if required as its value is only going up," he said.

Private equity firms are actively looking at investment opportunities in housing finance companies, private equity experts say.

Carlyle Group had invested over 108 crore in Repco Home Finance Ltd between 2007 and 2009. Repco went public in March 2013.

“Most private equity firm are banking on India’s urbanization story. With a growing number of nuclear families in India, there is immense growth opportunities for housing finance firms. Moreover, housing finance companies have long-term customers," said Avinash Gupta, head financial advisory at Deloitte Touche Tohmatsu India Pvt. Ltd, a consulting firm.

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