Three private equity groups set to make bids for Adani Capital buyout: Report

Three private equity groups are reportedly all set to make their binding bids for Gautam Adani’s six-year-old shadow bank, Adani Capital. The three groups include Bain Capital, Carlyle Group and Cerberus Capital Management. This development comes as Gautam Adani is said to be looking to exit non-core businesses to conserve capital for the core operations. 

Promoters of Adani Capital own nearly 90 per cent of the company, as per a report in The Economic Times, while the rest 10 per cent is owned by investment banker Gaurav Gupta who had joined the group in 2016. The funds are reportedly looking at a 100 per cent buyout. 

Adani Capital has Rs 4,000 crore of assets under management (AUM) and Rs 800 crore in book value. The group is expecting 2-2.5 times the book value, amounting to a Rs 2,000-crore valuation. 

As per the report, the new investor will also infuse Rs 1,000-1,500 crore in the company as growth capital. 

While most of the bidders are keen on full ownership of the business, the promoters are expected to decide whether a small stake would be retained for the future. 

Adani Capital was planning on an initial public offering (IPO) in 2024 to raise Rs 1,500 crore, and offering a 2 per cent stake. However, this was before the damning Hindenburg Research report was released. 

The company is working with Avendus for the sale process.

Adani Capital offers retail and wholesale lending across six verticals, with the farm sector being the largest of them all. It also provides loans to small and medium businesses, and has its presence in nine states including Gujarat, Maharashtra, Rajasthan, Karnataka, Andhra Pradesh, Telangana, Madhya Pradesh, Uttar Pradesh and Tamil Nadu. 

Meanwhile, earlier reports suggested that Adani Group promoters are pruning their holdings in the group companies through a combination of primary and secondary stake sales as they believe that building cash reserves is the best way forward considering the uncertain global investment environment. 

Also read: Adani Group says raised $9 bn in four years from marquee investors, including $3.25 bn in 2023

Also read: Adani promoters may pare more stake in group companies: Report