Bain Capital in talks to buy Adani Capital for Rs 1,500 croreReport

By India Today Business DeskGlobal private equity firm Bain Capital is reportedly in advanced negotiations to acquire Adani Capital, the shadow banking arm of Gautam Adani’s conglomerate, for a sum of Rs 1,500 crore, reported The Economic Times.

According to sources directly involved, Bain Capital has surpassed Carlyle to emerge as the frontrunner in the acquisition process, as Adani aims to realign his business interests and focus on core infrastructure while conserving cash.

Adani Capital, established seven years ago, is led by Gaurav Gupta, a former Lehman Brothers and Macquarie investment banker who joined the conglomerate in 2016. The management team, including Gupta, holds around 10 per cent of the company, while Gautam Adani owns approximately 90 per cent.

Over the past few months, Adani Capital has been up for sale, attracting interest from three private equity groups, including Bain Capital, Carlyle, and Cerberus Capital Management.

As of the end of the fiscal year 2023, Adani Capital reported assets under management amounting to Rs 3,977 crore, marking a 63 per cent increase from the previous year, with a book value estimated at Rs 800 crore.

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The acquisition deal is expected to see Bain Capital pay Rs 1,500 crore, which is twice the book value, and additionally, inject Rs 500 crore as primary capital for future growth.

While Gautam Adani is anticipated to exit his investment, it remains uncertain if the existing management team will retain a minority stake and continue running the company.

In FY23, Adani Capital recorded gross disbursements of Rs 2,482 crore and a total income of Rs 599 crore, with a profit after tax of Rs 105 crore.

Both Bain Capital and the Adani Group declined to comment on the matter, and Gaurav Gupta did not respond to emails seeking clarification, as per The Economic Times report.

Sources familiar with the matter pointed out that Adani Capital has faced limitations in fund flow due to its association with the Adani Group, as several banks and lending groups are approaching exposure limits to the conglomerate.

To facilitate the sale process, Adani is working with Avendus, a financial services firm.

Adani Capital offers retail and wholesale lending across six verticals, with the agricultural sector being its largest vertical in terms of assets under management.

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