Bain Capital buys 10.2 per cent in L&T Finance for Rs 1300 crore
Manjiri Meshram / 22 Sep 2015
In two separate deals the global private equity (PE) firm Bain Capital acquired 10.2 per cent stake in L&T Finance Holdings. In the first deal, the non-banking-finance company (NBFC) L&T Finance issued 95.3 million shares and warrants to Bain Capital at Rs 74 per share.
In two separate deals the global private equity (PE) firm Bain Capital acquired 10.2 per cent stake in L&T Finance Holdings. In the first deal, the non-banking-finance company (NBFC) L&T Finance issued 95.3 million shares and warrants to Bain Capital at Rs 74 per share.
In the other transaction L&T Finance sold an additional 85.2 million shares amounting to 4.95 per cent stake in the company to Bain Capital in a block deal at Rs 70 per share. Bain capital has acquired 10.3 per cent stake in L&T Finance for Rs 1,370 crore, Both transactions were done on a premium to the 18th September 2015 closing prize.
The company is expecting to grow the balance sheet size at a compounded annual rate of 25-30 per cent in the next three years. The equity infusion from Bain will help company to meet the capital requirement to support this growth.
L&T Finance has market leading positions in its core segments of renewables, roads and rural lending. The company has four business verticals which include infrastructure, finance, retail finance, asset management and insurance distribution. The total purchase price is about 1.8 times the net worth or book value of L&T finance.
It is the first investment in a financial service business in India for Bain Capital. Bain capital previously invested around USD 1 billion in few companies in India, including Hero MotoCorp and Genpact.
Today L&T Finance is trading at Rs 68, up by 1.27 per cent.
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