Warburg Pincus gets FIPB approval for Future Capital deal

According to an FIPB release, Cloverdell Investment - a Mauritius-incorporated affiliate of the private equity firm - will own part of an NBFC engaged in housing finance, stock and commodity broking, depository participant services and investment advisory activities.

Cloverdell agreed to buy a 53.67% stake in Future Capital in June for about INR5.63 billion ($102 million). In keeping with local M&A rules, it would then have to make an open offer for a further 26% of the company. However, the transaction was delayed so that the relevant parties could obtain the necessary regulatory approvals.

Future Capital, which is controlled by Kishore Biyani's Future Group, has been the focus of private equity interest more than a year. Morgan Stanley was hired to run an auction for the asset, with The Blackstone Group and Bain Capital both tipped as potential bidders before Warburg Pincus' late entry into the process.

Soros Fund Management and Och-Ziff Capital Management both invested in the company in 2007.

The NBFC space is popular among private equity investors, largely for the flexible, rupee-denominated financing options they provide to entrepreneurs who aren't necessarily comfortable selling equity stakes.

KKR set up its own NBFC in 2009, while Goldman Sachs Private Equity, Ashmore Group and Everstone Capital teamed up to create Indostar Capital Finance. It has also been reported that Apollo Global Management and ICICI Venture will launch a joint venture NBFC that will specialize in mezzanine financing, lending money for asset purchases through a combination of debt and equity components.

Earlier this year, Warburg Pincus and International Finance Corporation (IFC) jointly invested $50 million in another NBFC, Au Financiers.

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• Topics
• South Asia
• Financials
• Buyouts
• India
• buyout
• Financial Services
• Warburg Pincus Asia
• NBFCs