A local lender backed by private equity funds, a local private equity fund and an existing investor along with an American peer have shown preliminary interest in purchasing the home loan business of Jaipur-based lender Au Financiers. It’s seeking to exit the business after getting a small bank licence from the Reserve Bank of India, two people with direct knowledge of the development said. Everstone-backed local lender Indostar, PE fund Multiples and existing shareholder Kedaara Capital along with American PE fund Partners have entered the preliminary race to buy the Rs 1,500 crore home loan business. Local investment bank Axis Capital is advising Au Financiers. Sanjay Agarwal, MD and founder of Au Financiers, did not respond to emailed questions. Both Indostar and Multiples declined to comment. A Kedaara Capital official hadn’t replied to messages sent to his mobile phone as of press time. The sellers are seeking five times the net worth of the business which is estimated to be around Rs 1,100 crore. “In such deals, home loan business is sold at anywhere between 2.5 to 3 times of the net worth,” an investment banker aware of the development said. Net worth is the sum of share capital and profit. In 2015, US private equity fund Carlyle purchased a 49% stake in PNB Housing Finance at a valuation of 2.5 times the net worth of the company. “The promoters might sell out completely or would retain the maximum allowed 10% stake and c .. Read more at: http://economictimes.indiatimes.com/articleshow/50828586.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
Source: Economic TimesThree players in race to buy Au Financiers’ 1000-crore home loan business.
Industry: Financial services 2016-02-03
