A group of private equity (PE) investors led by New York Life Investment Management LLC and Jacob Ballas Capital India Pvt. Ltd has bought about 30% in Centrum Direct Ltd, the foreign exchange business unit of Centrum Capital Ltd, two people aware of the development said.
The PE funds invested about $50 million (Rs340 crore) to acquire the stake, the first of the two people cited above said, adding New York Life Investment Management will invest about $20 million. The deal will value the company at about Rs1,000-1,100 crore, said the second person, both of whom spoke on condition of anonymity.
Centrum Direct, which specializes in travel-related forex services, is the largest revenue generator for the group. In 2015-16, it generated sales revenue of Rs3,893 crore with a profit after tax of Rs22 crore. The firm operates money exchange counters at 14 airports in India. As part of expanding its business, Centrum Direct had launched Buyforex.com to provide forex solutions including foreign currencies, traveller’s cheques, and prepaid forex cards.
“The investment made by New York Life comes as a secondary issue and the promoters will channelize the funds into the new lending businesses of housing and SME finance,” said the second person.
A spokesperson for Centrum declined to comment. Mails sent to Srinivas Chidambaram, managing director and chief executive officer, Jacob Ballas Capital India and a spokesperson at New York Life Investment Management on Tuesday were not answered.
Jacob Ballas, along with New York Life Investment Management, manages three India-focused private equity funds—New York Life International India Fund, New York Life Investment Management India Fund, and NYLIM Jacob Ballas India Fund III—with over $600 million assets under management.
In a similar deal, NYLIM Jacob Ballas India Holdings, and Jacob Ballas Capital India had together invested about Rs50 crore in Adlabs Entertainment Ltd in 2014.
Last week, Centrum Capital said it plans to launch a dedicated alternative asset unit—Centrum Asset Management—and hired co-founder and managing director of PE fund Blue River Capital, Shujaat Khan to head it. Centrum currently manages a PE fund—Kalpavriksh—and co-manages real estate funds along with India Property Advisors Ltd (IPAL). The Mumbai-based group plans to launch new alternative investment funds (AIFs) for structured credit and distressed debt funds under Centrum Asset Management.
The Centrum Group, set up in 1995 by Chandir Gidwani and Khushrooh Byramjee, has 125 branches spanning 48 cities and offers financial services to corporate and retail clients with its investment banking (equity and debt), wealth management, institutional broking and foreign exchange services.
Source: Mint