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CreditAccess Grameen to buy Madura Microfinance. (Photo: Bloomberg)
CreditAccess Grameen to buy Madura Microfinance. (Photo: Bloomberg)

Deals Buzz: SBI Cards files papers for 9,600 crore public offering

In other news, Bain Capital is looking to deploy around $1 billion in Indian companies over the next three years, underscoring the private equity firm’s bullish stance on this market despite the current economic downturn

Mumbai: Mint brings you your dose of the top deals news, reported from newsrooms across the country

SBI Cards files papers for 9,600 crore public offering

SBI Cards and Payment Services Ltd, the credit card unit of the country’s largest lender filed initial share sale documents that could see the company sell shares worth around 9,600 crore, Mint reported. The share sale is poised to become the fifth-largest IPO in the country after Coal India Ltd, Reliance Power Ltd, GIC Re, and Oil and Natural Gas Corp and will help parent State Bank of India (SBI) raise funds to boost credit growth. SBI, which holds 74% stake in the unit, along with private equity firm Carlyle Group, which holds the rest 26% through its subsidiary CA Rover Holdings, will together sell 130.5 million shares through the IPO. While the secondary component of the IPO could be 9,100 crore, it will give a partial exit to both its shareholders. While Carlyle is looking to sell 10% stake via the IPO, SBI would sell 4% stake in the company. The company is looking to list within the next 3-4 months at a pre-money valuation of 65,000 crore. The initial share sale also includes a fresh issue of shares that will see the company raise 500 crore to augment its capital base and for business growth.

Bain looks to invest $1 billion over three years

Bain Capital is looking to deploy around $1 billion in Indian companies over the next three years, underscoring the private equity firm’s bullish stance on this market despite the current economic downturn, Mint reported. The US-based PE investor, which raised its fourth Asia-focused fund, the biggest so far, at $4.65 billion, has been a major investor in the country. “If you look at over the last seven years, we have invested over $2.5 billion and are one of the biggest investors in the country. There is no reason why we cannot keep investing in India at the same pace," said Amit Chandra, managing director and chairman of Bain’s India office. Chandra said Bain’s focus on India will be on writing a few large cheques. While Bain does not have hard geographic allocations for deploying capital, Chandra said India features amongst the top three markets for the PE firm. “India is one of the most important markets for us among the key markets that we invest in— Japan, China, India, Australia and South Korea. Historically, India has been 20-25% of any fund. This is just the Asia fund, we also invest into India from our global fund," he added.

CreditAccess Grameen to buy Madura Microfinance

Microfinance firm CreditAccess Grameen Ltd. has acquired Madura Microfinance Ltd, and will eventually merge it into its own business, Mint reported. CreditAccess will first acquire a 76.2% stake in Madura Microfinance from its existing shareholders for cash, and later merge the businesses and acquire a 100% stake, giving Madura shares of the acquirer instead. The transaction is subject to regulatory approvals. CreditAccess said in an exchange filing that the acquisition will help build a large microfinance firm, and gives it access to 11.1 lakh borrowers and 430 branches of Madura Microfinance, as on September 30, 2019. It strengthens CreditAccess’ leadership position in the microfinance market with a combined portfolio of 9,958 crore, 37 lakh borrowers and over 1,300 branches spread across 13 states and 1 union territory in India. While transaction value of the deal was not disclosed, a number of suitors, including Federal Bank and private equity funds have been looking to acquire Madura since last year for about 750 crore.

KKR to buy solar business of Shapoorji Pallonji, Mytrah

KKR is doubling down on the India renewables story and is in advanced talks to buy the solar portfolio of Shapoorji Pallonji Group for 1,500-1,750 crore ($230-250 million), The Economic Times reported citing people aware of the negotiations. It is also in talks to buy Hyderabad-based Mytrah Energy for 5,250 crore ($750 million). KKR alone is looking at deploying at least half of the amount involved as equity commitment in Mytrah while some existing lenders like Dutch pension fund manager APG Asset Management may join as co-investors by converting a part of their exposure and rolling over the rest. The deal with SP Group is expected to be stitched up in the coming weeks, while due diligence is underway for Mytrah. The transactions — if successful — will give KKR control over a 2-gw clean energy portfolio, making it a sizeable player in the space. Both SP Group and Mytrah are leveraged, and are facing liquidity challenges.

Apollo Cap, Cerberus compete with Adani for DHFL stake

Private equity firms Apollo Capital and Cerberus are competing with the Adanis for a stake in Dewan Housing Finance, as they work out a revival package for the first financial company to be taken into bankruptcy administration, The Economic Times reported citing three people familiar with the matter. Before the beginning of the resolution process at the National Company Law Tribunal (NCLT), the company has submitted a proposal to pay off its retail depositors. The Reserve Bank of India (RBI) has decided to refer the stressed home financier to the NCLT. As part of the capital restructuring, the promoters will bring down their stake from 40% to 19%. The new investor will buy 26 per cent by way of fresh issuance of shares. Shareholding will be reduced proportionately by all equity holders. The DHFL promoters have also approached the RBI to repay depositors in full. They have cited court proceedings for their inability to repay depositors. It has also sought the central bank’s intervention to retain the existing management people, citing early resolution of the debt crisis.

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