Axis PE’s Gupta, Knight quit captive fund
Axis Bank, India's third largest lender has made no secret of its intentions of leaving the private equity industry. Over the last year, it has entertained a management buyout offer for Axis Private Equity (which has a INR600 crore ($133 million) infrastructure fund) from Alok Gupta, the fund’s founding managing director. Upon the failure of those negotiations, Axis reportedly received bids from six suitors including IL&FS Investment Managers, Aditya Birla Private Equity, Shapoorji Pallonji group and US-based Darby Private Equity.
Apparently the failure of the latest bid from a "international fund with an excellent reputation," was the last straw for Gupta, who resigned to pursue other opportunities; sources close to him say that he is considering joining a US private equity firm to start up an Indian infrastructure business, or will start his own firm with likeminded colleagues from the industry.
Also resigning from Axis PE is William Knight, the fund's former UK-based director of Axis who left in early March. Knight has publicly has cited the board's decision to reject a new buyout proposal from a US-based PE company as the reason for his departure.
In an interview with India's Business Standard, Knight said that the proposal "would have enabled the company to go forward in a manner that would benefit its unit holders. The majority decision of the board to reject the proposal and to retract and diminish the business, left me with the conclusion that my value to the company as an independent voice on the board would in the future be very limited."
Besides Axis, the fund's other investors include state owned banks such as Canara Bank, Bank of Baroda, Union Bank of India, United Bank of India, Corporation Bank and Punjab National Bank opposed the sale citing that their reason for investing is business because of Axis Bank's reputation and were not in favor of ownership in the hands of professionals. A decision has been made to wind down the company, not to seek any future investors.
Appointed with the task is Arun Prakash S Korati, an executive director of Axis PE, has been recently appointed as the acting CEO. According to a statement by the bank, Korati has been actively involved in the strategic and investment decisions of the company. Axis Private Equity will continue to leverage opportunities available in the infrastructure space.
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