Aditya Birla Capital to raise $292m from Advent, PremjiInvest, promoters

Kumar Mangalam Birla, Chairman, Aditya Birla Group. Photo: Mint

Aditya Birla Capital Ltd (ABCL) on Thursday said it has secured the board’s approval to raise about $292 million (Rs2,100 crores) through preferential allotment to US-based private equity firm Advent International, homegrown investor PremjiInvest, and promoter group entities.

The proceeds will be utilised to fuel the growth of the company’s businesses as well as to repay outstanding debt.

ABCL has entered into definitive share subscription agreements with Jomei Investments Limited, an affiliate of Advent International, and PI Opportunities Fund, an affiliate of Premji Invest, it said in a regulatory filing on Thursday. Jomei Investments will pump in Rs 1,000 crore into ABCL while PI Opportunities Fund will contribute with an investment of Rs 100 crore.

Another Rs1,000 crore is being pumped in by the two promoters – Grasim Industries Limited (Rs770 crores) and group entities (Rs230 crores).

Upon the completion of the issuance, Advent, through its affiliate, will hold about 4.15 per cent of ABCL’s equity capital, while Premji Invest will hold approximately 4.11 per cent. The promoter and promoter group entities will hold about 70.54 per cent in ABCL.

Advent International Managing Director and Head of India Shweta Jalan, said: “Advent International’s long-term commitment to India remains robust and today, we believe that there is an exciting opportunity to invest into the financial services sector.”

The equity capital will be raised at Rs 100 per share, which is at a 10.62 per cent premium to the ABCL closing price of Rs 90.40 as of 4 September 2019, and is subject to customary closing conditions, including regulatory and shareholder approvals, ABCL said.

ABCL has aggregate average assets under management (AAUM) across asset management and insurance businesses of over Rs3 lakh crores, a lending book of Rs62,000 crores across its non-banking and housing finance businesses, and gross written premium of over 8,000 crores.

Meanwhile, Advent International has been investing in India since 2007 and opened its Mumbai office in 2009. Over the past 12 years, the firm has deployed more than $1 billion in several companies with headquarters or operations in India across sectors such as financial services, consumer products, healthcare, industrial and technology.

The firm’s most recent deal in India was the acquisition of Bengaluru-based packaging solutions company Manjushree Technopack in October last year. The deal paved the way for a full exit for homegrown PE firm Kedaara Capital. Earlier in June, Advent also reportedly emerged as the sole bidder for Mumbai-based biopharma company Bharat Serums & Vaccines.

At the global level, Advent International recently closed its ninth vehicle, GPE IX, at the hard cap of $17.5 billion, surpassing its initial target of $16 billion.