Bain Capital gains majority stake in Adani Capital

The private equity company Bain Capital stated that it obtained 90% of Adani Capital and Adani Housing, the two non-banking financial companies of the Adani Group, for an undisclosed sum. Gaurav Gupta, the current CEO and managing director, will maintain the remaining stake in the two companies, the statement said. Bain Capital has also committed $120 million in primary capital to facilitate the NBFC's ongoing growth. Additionally, Bain Capital will make available to the Firm a $50 million liquidity line in the form of non-convertible debentures.

“The transaction will buy out 100% of the Adani family’s private investments in the company, with Gaurav Gupta fully rolling his stake in the company and continuing to serve as Managing Director and CEO," the release said. “The company has strong business fundamentals, an experienced team, with the ability to serve and expand to core segments like agriculture, housing and to underbanked rural areas," said Rishi Mandawat, Partner, Bain Capital.

The NBFC, which focuses on lending to MSMS, agriculture, and affordable housing segments, is trying to solve the $300 billion+ unmet retail MSME credit demand in the country. “I have known Gaurav since his days as an investment banker," said Gautam Adani, Chairman of Adani Group. “He wanted to become an entrepreneur and I backed him. 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." Adani Capital has assets under management or AUM of nearly $500 million, a network spanning more than 170 branches across eight states.

“Our aim has always been to support micro-entrepreneurs and first-time homeowners in Bharat and to be the most economical and convenient lender to our customers by leveraging technology. With Bain committing Rs 1,000 Cr of capital in the Company, we are now equipped to grow 4x from here," Gupta said. The transaction is expected to close in Q4 2023, pending necessary regulatory and market approvals. Though MSMEs contribute 30% to the gross domestic product, according to the Ministry of Micro, Small & Medium Enterprises, only 10% of MSMEs in India have access to a formal source of credit to support growth aspirations, particularly more acute in rural areas.

Avendus Capital was the exclusive financial advisor to Adani Capital, Adani Housing Finance and their shareholders on this transaction. Rothschild was the exclusive financial advisor to Bain Capital on this transaction. This transaction demonstrates Bain Capital's confidence in India's financial services sector. It has already invested in Axis Bank, 360One (formerly IIFL Wealth), Judo Bank, L&T Finance Holdings, Legacy Corporate Lending, and more.