GIC invests in India's Capital First, Warburg Pincus part exits

Market data indicates that Warburg Pincus sold its 24.3 million shares for INR727.35 each, giving it proceeds of INR17.7 billion ($274 million), while GIC paid INR725 each for its 8.7 million shares, or INR6.3 billion in all. Other buyers included Morgan Stanley, HDFC Standard Life Insurance and Natwest Bank.

The 9% stake acquired by GIC raises its holding in the company to 14%, including the shares it bought in November. Warburg Pincus will see its holding reduced from 61% to 36%.

The GP has held a majority stake in Capital First since 2012, when it paid INR8.1 billion for a 71.9% stake in the company, then called Future Capital, in a management buyout from its previous owners, the Future Group. It later invested another INR1.78 billion along with HDFC Standard Life Insurance in 2014.

Capital First specializes in micro, small and medium-sized enterprise (MSME) and consumer financing, including home and vehicle loans, loans to salaried corporate employees and loans against property. The company claimed to have grown its assets under management to INR179 billion as of September 2016, representing 32% year-on-year growth, with its retail loan portfolio contributing to 90.1% of overall assets under management.

In its most recent annual report Capital First recorded revenue of INR18.5 billion for the year ended March 2016, up from INR14.3 billion the year before. Net profit grew from INR1.1 billion to INR1.6 billion over the same period.

In addition to Capital First, Warburg Pincus is also a substantial backer of Au Financiers, an NBFC with several other PE investors including ChrysCapital, Kedaara Capital and the International Finance Company (IFC). All four backers are set to make partial exits in Au’s upcoming IPO.

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• Topics
• South Asia
• Financials
• Open market
• PIPEs
• India
• NBFCs
• Warburg Pincus Asia
• GIC Private
• Exit