DHFL’s survival hinges on ₹3,000 crore equity infusion
Mortgage lender Dewan Housing Finance Corp. Ltd (DHFL) needs between ₹2,500 crore and ₹3,000 crore of fresh equity investments immediately to meet capital adequacy requirements and sustain lending operations, Mint reported citing two people aware of the development. On Saturday, DHFL said it has been under substantial stress since the second half of FY19 due to consistent downgrades in its credit rating since February. Its ability to raise funds has been impaired and the business brought to a standstill, with virtually no disbursements, raising a significant doubt on the ability of the company to continue as a going concern, it said. As of December, DHFL had an outstanding debt of ₹1 lakh crore, of which 38% was in the form of bank loans, 47% from debt markets and 10% through deposits. PE firms Oaktree Capital, Cerberus Capital and AION Capital have already submitted non-binding offers to buy a stake in DHFL. The mortgage lender’s board will discuss the offers at its next meeting.
Byju’s valuation soars to $5.5 billion in latest funding round
The valuation of Byju’s, India’s most valued ed-tech company, surged by $2 billion to $5.5 billion in its ongoing Series F funding round, an unprecedented jump within a single round, as investors clamoured for a piece of the education startup that has reported dizzying growth, Mint reported. The firm first raised capital in the ongoing Series F round in December, giving it a valuation of $3.5 billion. In the fourth round in the first week of July, it raised $86 million ( ₹589 crore) at a valuation of $5.5 billion. Such valuation differences within a round are uncommon, according to the experts who based Byju’s valuation jumps on its rapid growth. Bengaluru-based Think and Learn Pvt. Ltd, which runs Byju’s, grew its revenue threefold in the year ended 31 March to ₹1,430 crore and turned profitable on a full-year basis. Its expansion into grades I-III and entry into the US market have contributed to the valuation jump, investors said. The ed-tech firm, which has already attracted more than 35 million students on its platform, has so far raised ₹3,159.4 crore ($460.8 million) in the round, led by investors such as South Africa’s Naspers, private equity firm General Atlantic, and Canada Pension Plan Investment Board, shows data sourced from business information platform Paper.vc.
NIIF may invest $100 million in Multiples PE’s third fund
The National Investment and Infrastructure Fund (NIIF) is considering an investment of $100 million in the third fund of private equity firm Multiples Alternate Asset Management Pvt. Ltd, Mint reported citing two people close to the deal. Multiples Private Equity Fund III, which began raising funds from limited partners (LPs) or investors last year, is targeting to raise one of the largest Indian private equity funds at about $900 million. The third fund is anchored by Canada Pension Plan Investment Board (CPPIB) for $200 million or 25% of the total fund value, whichever is lower. Based on the commitments so far, the total fundraise stands at close to $300 million, as of July. If the commitment from NIIF and another new investor that is also evaluating the PE firm comes along, Multiples’ first close for the third fund could reach between $400-$500 million. The deal, however, is at a very early stage and both the parties are still evaluating and discussing the investment terms. Multiples, which raised its first fund of $405 million in 2011, had closed its second fund of $700 million (including a $150 million co-investment pool) in 2017, and launched its third fund, Multiples Private Equity Fund III, in February 2018. It has made nearly 20 investments from the first and second funds.
Suzlon stares at offshore bonds default, asks investors to hold on
Suzlon Energy is staring at a default on redemption of its foreign currency convertible bonds (FCCBs) worth $172 million( ₹1,200 crore) that will be due on Tuesday, The Economic Times reported citing three people involved in the matter. The stressed wind power firm has told its bondholders that they will have to wait until banks accept its proposed one-time settlement plan, that depends on a deal being negotiated with Canadian investor Brookfield, which is interested in acquiring equity in the Tulsi Tanti-led company that has net term debt, including FCCBs, of ₹7,761 crore and working capital debt of ₹3,380 crore. In 2012, the firm had defaulted on FCCB repayment, the biggest at the time, which triggered cross defaults on other bonds. Suzlon Energy had then issued these bonds that are due for redemption on Tuesday to replace the bonds it was unable to redeem then. In March this year, the loss-making company defaulted on repayment of principal and interest to lenders worth ₹412 crore towards term loans and working capital facilities and on making payments to certain overdue creditors.
Aditya Birla Fashion acquires 51% stake in Finesse International for ₹60 crore
Aditya Birla Fashion and Retail Ltd (ABFRL), which owns brands such as Louis Philippe, Peter England and Van Heusen, has acquired a 51% stake in Finesse International Design that retails bespoke ceremonial wear and contemporary apparel for men and women under the Shantanu and Nikhil brand for ₹60 crore, Mint reported. The acquisition, which is a combination of primary equity infusion and secondary share purchase, comes a month after ABFRL acquired ethnic apparel and lifestyle retailer Jaypore for ₹110 crore. The latest acquisition will help ABFRL expand its presence in the branded ethnic apparel and accessories market covering both bespoke ceremonial wear and prêt lines. Finesse was set up in 2007 and runs five stores selling bespoke ethnic wear and contemporary Indian designs by Nikhil Mehra and Shantanu. It owns the brand Shantanu and Nikhil under which it also sells apparel, footwear and accessories. In FY19, it reported a revenue of ₹35 crore.
Adani Port likely to raise $650 million via bond sales
Billionaire Gautam Adani-controlled Adani Port Special Economic Zone (APSEZ) is raising up to $650 million in another overseas bond sale, following up on its $750-million fund raise three weeks ago, The Economic Times reported citing three people familiar with the matter. The proposed five-year bonds, which would help the firm save at least 30-50 basis points in borrowing costs, will be used refinance high-cost debt. Pricing terms are not final yet. Bank of America ML, Standard Chartered Bank, Citi, JP Morgan, MUFG, and Barclays are some of the investment bankers helping raise the money. About three weeks ago, APSEZ mopped up $750 million by selling overseas bonds, the proceeds from which were supposed to fund expansion and reduce high-cost debt.
Ritu Kumar looks to raise $20 million
Indian fashion house Ritu Kumar, which owns three designer labels, is looking to raise up to $20 million, as it seeks to scale up its casual contemporary women’s wear brand Label, Mint reported citing Amrish Kumar, managing director at the fashion label that was started in the late 1960s. With fresh investments coming in, it plans to to grow the Label brand and expand it to new segments such as home furnishings and accessories. The company, which offers contemporary apparel such as tunics, dresses, lowers and ethnic jackets for women, had raised ₹100 crore from private equity firm Everstone in 2014.