Warbug Pincus begins Kotak Mahindra divestment

According to The Times of India, the private equity firm had a 9.28% stake in Kotak Mahindra - one of India's top-ten financial services firms - worth approximately $700 million. Warburg Pincus sold a 1.88% stake in Q1 of this year, with separate reports suggesting that more shares have been sold recently. Warbug is said to be divesting more of its holding in coming months as part of a phased exit process.

Citing sources close to the firm, The Times reported that Warburg has seen 4x return on its investment, or INR650 crore ($150 million), in its recent stake sale. The firm first bought a 2.75% stake in Kotak Mahindra for INR75.9 crore in 2004, and has since represented Warburg's first and largest financial services investment in the market. The firm extended its stake in the bank via multiple investment tranches.

This is the second exit Warburg looks to make in India in recent months. In June, Max India, an insurer and hospital operator, announced a plan to buy a 16.37% stake in its subsidiary Max Healthcare from Warburg Pincus, offering INR140 crore ($31 million).

Meanwhile, in March, Kotak Mahindra Group set out to raise $300 million of its own, allocated for an infrastructure-focused private equity fund in India. The group received capital commitments from Brookfield Asset Management in Toronto, Sumitomo Mitsui in Tokyo, and Kotak itself.

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• Topics
• South Asia
• Financing
• Warburg Pincus Asia