MUMBAI: Billionaire Gautam Adani has signed an agreement for the sale of his financial services business, marking an exit from a segment that he entered six years ago.
Adani Finserve, a closely held company, will sell 90% of Adani Capital and Adani Housing to American investment firm Bain Capital for an undisclosed amount.
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Adani Capital and Adani Housing are led by Gaurav Gupta, who joined the power to-airports group in October 2016 to start the financial services business for the conglomerate. Gupta owns 10% of Adani Capital and Adani Housing, which together manages assets worth $500 million (Rs 4,100 crore). He will continue to hold the 10% and run the financial services business under Bain’s ownership. Adani Capital offers loans to MSMEs while Adani Housing provides affordable housing loan options for rural areas.
Bain will infuse $170 million (Rs 1,394 crore) in the financial services unit to facilitate its growth. The unit, reportedly valued at Rs 2,000 crore, will continue to use the Adani name for some time till the transition takes place including getting approval from the RBI. The Adani-Bain deal, stitched together by Avendus Capital and Rothschild, is expected to be concluded before the end of this year.
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“I have known Gaurav since his days as an investment banker,” said Adani. “He wanted to become an entrepreneur and I backed him. He has not only built a good financial services business with a focus on the underserved in semi-urban and rural India but has also valuably contributed to the Adani Group. I am very happy that a credible investor like Bain Capital is stepping in now and this will help the business grow many fold from here. ”
Adani’s exit coincides with billionaire Mukesh Ambani spinning off the financial services business which is set to get it listed on the bourses. Adani’s move signals a broader attempt by the group to evaluate projects following the Hindenburg Research’s attack in January. Adani rejected Hindenburg’s claims but billions of dollars were wiped off his group’s market valuation and a Rs 20,000-crore follow-on offering by his flagship Adani Enterprises had to be withdrawn.
About the same time last year, Gupta had told Bloomberg News that the financial services unit was planning an IPO in 2024, selling about a 10% stake. The plan has changed with Adani now selling the business to Bain.
