Bain to invest $1b in India's Axis Bank

The GP has agreed to subscribe to 87.5 million shares at INR525 apiece and 40 million convertible warrants at INR565 apiece, pending regulatory approval, according to a filing. Axis is raising INR116.3 billion in total, with Capital Group and the government-owned Life Insurance Corporation of India among the other investors.

The commitment is intended to bolster Axis’ capital adequacy ratio. The bank’s gross non-performing assets (NPAs) rose from INR220 billion to INR274 billion during the three months ended September – the gross NPA ratio came to 5.90% compared to 4.17% a year earlier – after a central bank audit of leading private sector lenders resulted in requests that certain loans be reclassified.

Axis is the country’s third-largest private sector bank with INR6.3 trillion in balance sheet assets, including INR4.2 trillion in deposits. It has 3,485 branches and 14,332 ATMs across 1,946 cities and towns nationwide, as well as nine international offices. Net profit for the 2017 financial year came to INR36.8 billion, down from INR82.2 billion for the previous 12 months.

“In India's banking industry we believe reach, scale and analytics-driven underwriting will become increasingly important. Axis Bank's leadership team, led by Shikha Sharma, is very well positioned to take advantage of the same, in what promises to be an exciting growth phase for private sector banks in the country,” said Stephen Pagliuca, co-chairman of Bain Capital, in a statement.

The private equity firm’s existing exposure to Indian financial services includes L&T Finance Holdings, a unit of engineering conglomerate Larsen & Toubro. It acquired a 10.3% stake in the business for approximately INR13.04 billion in 2015.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• South Asia
• Financials
• PIPEs
• India
• Bain Capital Asia
• Financial Services