MUMBAI: Indian banker Rana Kapoor’s family is planning to sell a stake in their six-year-old mortgage finance company, people with knowledge of the matter said, as rising wariness in the credit market erodes growth prospects of shadow finance firms.
The family office run by the three daughters of the Yes BankLtd. co-founder is working with Nomura Holdings Inc. on the potential deal, according to the people, who asked not to be identified as the information isn’t public. It has reached out to several private equity firms to gauge their interest, the people said.
While default at Infrastructure Leasing & Financial Services Ltd. (IL&FS) triggered a liquidity crunch in India’s credit market, it has helped private equity firms such as Blackstone LP acquire assets. Many founders — from tycoon Anil Ambani to media mogul Subhash Chandra — are selling assets to tide over a liquidity crunch. Shadow banks are facing most of the burnt as the cracks from the credit squeeze spread far and wide forcing investors to shun their debt and raising rollover risks for outstanding borrowings.
The Kapoor family office could consider selling a majority stake in the business, the people said. Deliberations regarding a potential sale are at an early stage, and there’s no guarantee they will lead to a transaction, the people said. An official at the fund — known as The Three Sisters: Institutional Office — referred queries to ART Housing.
ART Housing’s founders are planning to sell a minority stake to fund expansion, Arvind Hali, chief executive officer of the lender said in an email. The mortgage financier, with 35 branches, is in the process of raising equity capital from institutional investors, he said. A representative for Nomura didn’t immediately respond to an email seeking comment.
Wadhawan Global Capital, parent of an Indian mortgage lender Dewan Housing Finance Corp., sold its stake in Aadhar Housing Finance Ltd. to Blackstone earlier this year. Meanwhile a family office that manages money for India’s wealthy Jhunjhunwala family is looking to invest in finance companies which have been pummeled by the crisis.
Kapoor built Yes Bank into India’s fourth-largest private lender over 15 years until the central bank forced him out earlier this year amid a controversy over bad-debt accounting. The banker is not involved in any capacity including as a shareholder, director or management of the family office run by his three daughters, an email statement from the company in November showed.