Bain Capital buys majority stake in India’s Adani Capital, invests $120m to boost growth
US-based private investment firm Bain Capital has agreed a deal to acquire a 90% stake in India’s Adani Capital and Adani Housing, the non-banking financial institution (NBFI) arm of Adani Group, for an undisclosed sum.
Bain Capital to acquire 90% stake in Adani Capital and Adani Housing
The deal will see Bain Capital fully acquire the Adani family’s private investments in the lending company, with Gaurav Gupta retaining his 10% stake and remaining on board as managing director and CEO.
Adani Capital began its operations in 2017 with the aim to democratise access to lending products in India and provide financing for micro, small and medium enterprises (MSMEs) as well as agriculture-focused firms to promote rural development.
The firm offers commercial vehicle loans, farm equipment loans, business loans, and supply chain finance services and currently boasts around $500 million in assets under management (AUM). Adani Housing provides customised financing solutions for those looking to buy a new house.
Bain Capital says it will also invest $120 million in capital to “facilitate the company’s ongoing growth” as it looks to position the NBFI as a standalone company and “drive expanded lending to the underserved MSME, agriculture, and affordable housing segments”.
The US firm says that while MSMEs contribute around 30% of India’s gross domestic product (GDP), only 10% of firms currently have access to a formal source of credit to support their growth.
“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,” says Rishi Mandawat, 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.”
Bain Capital has previously invested in financial services companies such as Axis Bank, Judo Bank and L&T Finance Holdings, among others.
The deal is expected to close by the end of the year pending regulatory approvals.
