Bain Capital to acquire 90% stake in Adani Capital; Gaurav Gupta to remain MD

Bain Capital, an American private investment firm, has signed a deal to acquire 90% stake in Adani Capital and Adani Housing, which are non-core businesses of Adani Group. The move is being seen as part of billionaire Gautam Adani-led conglomerate’s strategy to monetise its non-core assets and focus on core projects such as ports, power generation, and green energy businesses.

As part of the deal, Bain will buy out 100% of the Adani family’s private investments in the company, while Gaurav Gupta will retain his 10% shares in the firm and continue to serve as Managing Director and CEO, Bain Capital said in a release released on July 23. 

The transaction is expected to close in Q4 2023, subject to necessary regulatory and market approvals.

Bain Capital has also proposed to invest $120 million in primary capital to facilitate the company’s ongoing growth. Further, the investment firm is also immediately making available to the company a liquidity line $50 million in the form of Non-Convertible Debentures (NCDs).

“I have known Gaurav since his days as an investment banker,” said Gautam Adani, Chairman, Adani Group. “He wanted to become an entrepreneur and I backed him. He has not only built a good financial services business with a focus on the underserved in semi-urban and rural India but has also valuably contributed to the Adani Group. I am very happy that a credible investor like Bain Capital is stepping in now and this will help the business grow manyfold from here,” Adani says.

Gaurav Gupta, who joined the Adani Group in October 2016 to set up the financial services business, says, “It has been an extraordinary six years; to have the capital, a strong brand and, more importantly, the freedom to build a business is perhaps unprecedented – and for this, I thank Gautam bhai for the opportunity and for his faith in me.”

“Our aim has always been to support micro-entrepreneurs and first-time homeowners in Bharat and to be the most economical and convenient lender to our customers by leveraging technology... With Bain Capital committing ₹1,000 crore of capital in the company, we are now equipped to grow 4x from here,” says Gupta.

“Gaurav and the team have built a scale lending business that supports entrepreneurialism and is trying to solve the $300 billion+ unmet retail MSME credit demand in the country. The company has strong business fundamentals, an experienced team, with ability to serve and expand to core segments like agriculture, housing and to underbanked rural areas,” says Rishi Mandawat, a Partner at Bain Capital.

“We see compelling opportunities to partner with Gaurav and team to support and facilitate Adani Capital’s next phase of growth by providing access to significant capital, strategic and operating resources, and deep experience partnering with financial services businesses in India and across the globe.”

Adani Capital is the non-banking financial company (NBFC) arm of Adani Group and commenced lending operations in April 2017. As of now, Adani Capital has an AUM of nearly $500 million, a network spanning more than 170 branches across eight states, and a team of over 2,500 professionals.

Meanwhile, Adani Housing Finance, the housing finance arm of Adani Group, was incorporated in 2017 to provide customised financing solutions to customers in the affordable housing segment and simplify the lending process for all.

Avendus Capital was the exclusive financial advisor to Adani Capital, Adani Housing Finance and their shareholders on this transaction. Rothschild was the exclusive financial advisor to Bain Capital on this transaction.

Boston-based Bain Capital has invested in diversified financial services businesses in India and across the globe, including Axis Bank, 360One (fka IIFL Wealth), Judo Bank, L&T Finance Holdings, Legacy Corporate Lending, and more.

DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.