Bain Buying 90% Stake in India’s Adani Capital, Adani Housing, Buying Out Family

Private equity major Bain Capital on Sunday announced an agreement to acquire 90 percent of two companies controlled by Indian billionaire Gautam Adani.

The transaction will buy out 100 percent of the Adani family’s private investments in Adani Capital, which bills itself as India’s top non-banking financial services firm, and mortgage lender Adani Housing Finance.

Gaurav Gupta, managing director and CEO of the companies, will fully roll his stake and continue to serve in those posts, Boston-based Bain said in a release. No deal value was disclosed, but a local media account put the transaction at INR 1,600 crore ($195.6 million).

“Gaurav and the team have built a scale lending business that supports entrepreneurialism and is trying to solve the $300 billion-plus unmet retail MSME credit demand in the country,” said Bain partner Rishi Mandawat. “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.”

Upfront Commitments

Bain has also committed $120 million in primary capital to facilitate the Adani companies’ ongoing growth and will make available a $50 million liquidity line in the form of non-convertible debentures.

Gautam Adani voiced confidence in Gupta, whom the Adani Group chairman said he had known since the latter’s days as an investment banker at Macquarie Capital and Lehman Brothers.

“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,” he said. “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.”

The deal, which is expected to close in the fourth quarter of this year, comes as Adani Group continues to recover from a January stock sell-off triggered by an unflattering report on the Indian conglomerate by US short-seller Hindenburg Research.

Affordable Finance

Adani Capital was founded in 2017 to provide affordable and convenient lending and support small businesses and entrepreneurs in India.

The company has assets under management of nearly $500 million and a network spanning more than 170 branches across eight Indian states, employing over 2,500 staff.

“Our aim has always been to support micro-entrepreneurs and first-time homeowners in Bharat (i.e. India) and to be the most economical and convenient lender to our customers by leveraging technology,” Gupta said. “The team and I are very pleased to welcome a partner like Bain Capital who shares our vision of making affordable finance available to our customer segment with a strong focus on customer literacy and education.”