Deals Buzz: RBL Bank looks to raise up to ₹2,000 crore via QIP route7 min read . Updated: 25 Nov 2019, 10:48 AM IST
In other news, Indigo Paints Pvt. Ltd. has hired bankers to raise ₹900 crore through an initial public offering (IPO) by next year
Mumbai: Mint brings you your dose of the top deals news, reported from newsrooms across the country
RBL Bank looks to raise up to ₹2,000 crore via QIP route
Private lender RBL Bank Ltd is looking to raise up to ₹2,000 crore through a qualified institutional placement (QIP) offering, Mint reported citing three people aware of the development. The bank has appointed ICICI Securities, IIFL Securities and IDFC Securities as advisers to the transaction. The roadshows have already happened in the US, Europe and Asia markets and the timing of the QIP launch will be decided soon. The development follows RBL Bank announcement to shareholders at its annual general meeting on 9 July that it would raise equity capital not exceeding ₹3,500 crore. The bank had a capital adequacy ratio of 12.3% as of 30 September, falling from 13.7% in the last fiscal. On 22 November, CNBC TV18 reported that RBL Bank was in talks with a strategic investor, Bajaj Holdings & Investment and two private equity firms- ChrysCapital and Blackstone, for the proposed share sale, which could help it raise about ₹2,000 crore to shore up its capital base. In 2017, the bank had raised ₹1,680 crore of equity capital by selling 32.6 million shares for ₹515 apiece on a preferential basis to its existing investors, UK’s development finance institution CDC Group Plc, HDFC Standard Life Insurance, ICICI Lombard General Insurance, Steadview Capital Mauritius and Multiples Private Equity, among others.
Indigo Paints eyes listing, seeks to raise ₹900 crore by next October
Indigo Paints Pvt. Ltd. has hired bankers to raise ₹900 crore through an initial public offering (IPO) by next year, Mint reported citing two people aware of the development. The Pune-based firm has appointed ICICI Securities, Edelweiss Securities and Kotak Securities as advisers for the IPO, said one of the people cited above. “The company may be valued at over ₹6,000 crore and is likely to file the draft prospectus with Sebi (Securities and Exchange Board of India) in the next 4-5 months. There will also be a component of fresh issue, which could be about ₹300 crore. We are looking to do this IPO, sometime in the next year around October. The proceeds from the fresh issue would largely be used towards capacity expansion and brand building. While the company is controlled by Hemant Jalan, founder and managing director of the firm and his family, private equity firm Sequoia Capital owns about a 38% in the company. Sequoia Capital will sell a portion of its stake via the offer for sale route during the IPO.
ShareChat to monetize platform this quarter as funding downturn looms
Twitter-backed regional language social network ShareChat is engaging with advertisers to monetize its platform this quarter after its losses ballooned 12 times last fiscal, Mint reported citing three people aware of the matter. ShareChat, run by Mohalla Tech Pvt. Ltd, plans to open up advertising space on its platform as soon as next month, and is meeting food and beverage makers, cement and steel makers, among others, towards this end. Given that ShareChat’s user base is driven by tie- 2 and tier-3 consumers, it will look for advertisers—goods and services reliant on these areas. Despite its early user growth and heavy investor interest, ShareChat is under pressure to monetize its platform following the entry of Chinese rivals Helo and TikTok late last year. Both platforms, owned by China’s ByteDance—the world’s most valuable technology startup at $75 billion—have been aggressively marketing products here by spending millions of dollars a month to win users. So far, despite not making money, ShareChat has raised a significant amount of equity funding, though its last round took longer than expected to close. It raised $100 million in August led by Twitter, with participation from TrustBridge Partners, Lightspeed Venture Partners, and SAIF Partners, among others. Long term plans for ShareChat also include monetizing via social commerce by using its platform as a marketplace to sell goods.
Paytm raises $1 billion from SoftBank, Ant, others
One97 Communications Ltd, which operates Paytm, has raised $1 billion from new and existing investors, including Japan’s SoftBank Group and China’s Ant Financial, Mint reported citing a person familiar with the development. The funds will allow the digital payments firm to beef up its finances to make a deeper foray into India’s hinterland amid intensifying competition from Google Pay and Walmart Inc.-owned PhonePe Pvt. Ltd. The fundraising has lifted Paytm’s valuation to $16 billion, from the $15 billion it was valued at in August when some of its employees cashed out their shares in a secondary sale to unnamed New York-based investors. Paytm said on Sunday that it raised a fresh round of equity from existing shareholders such as Ant Financial, an affiliate of Alibaba Group Holding Ltd, and SoftBank Vision Fund. They were joined by new investors, including T. Rowe Price Associates, Inc. Discovery Capital, an existing shareholder of Paytm, also took part in the round. The company, however, did not disclose the quantum of funds raised. The fresh investments will be used for growing the payments and financial services business, said Paytm founder Vijay Shekhar Sharma. Paytm plans to invest ₹10,000 crore over the next three years to bring financial inclusion to more under-served users across India.
Oyo, Apax join race for significant stake in CCD
SoftBank-backed hospitality chain Oyo and British private equity firm Apax Partners have joined the race to buy a significant stake in Café Coffee Day (CCD), The Economic Times reported citing two people close to the development. Both Oyo and Apax have signed nondisclosure agreements (NDAs) with Coffee Day Enterprises (CDEL) and have initiated discussions to buy the group’s coffee business. KKR, TPG Capital and Bain Capital have also signed similar agreements with CDEL and are in the race to buy CCD, ET had reported on November 15. There have been five bids and all are being evaluated and the company’s board had started negotiations with at least two of the interested parties. There is a lot to consider for the CDEL as all these potential investors have different plans for CCD. Some of those submitting bids were only interested in buying the CCD brand, while others were also interested in some of the other functions of the existing operations. Oyo is the only strategic investor — in a similar line of business — to have submitted a bid.
Tata Steel to raise $1.75 billion via European Unit
Tata Steel is raising up to $1.75 billion ( ₹12,563 crore) in syndicated offshore loans through its European unit to lower borrowing costs in the first mega fundraising at India’s biggest and the oldest maker of the alloy, which shelved a joint-venture proposal in the continent with Germany's Thyssenkrupp earlier this year, The Economic Times reported. Through this syndication, the company aims to reduce overall borrowing costs by 100 basis points. The debt will likely have five-year maturities and the loans will be priced after adding a mark-up, or spread, above the US dollar-based London Interbank Offered Rate (Libor). The spread may be in the range of 200-250 basis points. A basis point is 0.01 percentage point. Net debt at Tata Steel increased by almost 4% to ₹1.07 lakh crore in the three months to September. The company is in the process of appointing up to a dozen investment bankers. The proceeds would be used for refinancing and other business purposes.
Investcorp closes $45 million investment in dialysis service provider NephroPlus
Global alternative asset manager Investcorp has closed an estimated $45 million (about ₹323 crore) funding round in dialysis services provider NephroPlus, in the process, providing an exit to one of the Hyderabad-headquartered company’s existing investors, The Economic Times reported. The latest transaction will see SeaLink Capital Partners, the investment firm founded by former KKR senior executive Heramb Hajarnavis, score an exit from its three-year-old investment. SeaLink was reported to have invested about ₹90- ₹100 crore in the nine-year-old company. The Hyderabad-based company also counts venture capital firm Bessemer Venture Partners and International Finance Corp, the private market investment arm of the World Bank, among its list of investors. Proceeds from the latest round of funding will see NephroPlus, which currently has about 196 centres, spread across 116 cites in 20 states in India, expand in its home market, as well as establish its footprints overseas, including in the Middle East and South East Asia.
Edelweiss’ NBFC mops up ₹515 crore via retail bonds
ECL Finance, the nonbanking finance arm of the Edelweiss Group, has raised ₹515 crore by issuing retail bonds, the proceeds of which will be used to expand credit to mid- and small-sized companies, The Economic Times reported. This is one of the few successful public issues for NBFCs in recent times, with fund flows to the sector reducing in the aftermath of the IL&FS defaults. The public issuance, which was launched three weeks ago, closed Friday. “We are diversifying our liabilities profile," said Deepak Mittal, managing director and CEO at ECL Finance. “We aim to raise money equally from banks and retail investors, taking the share of bonds to 50% of our borrowing book." Edelweiss is likely to do a similar bond sale next year, around May-June.