Avendus Group, a provider of financial services with an emphasis on customised solutions in the areas of financial advisory, capital markets, wealth management and alternative asset management, is set to beef up its fledgling NBFC arm by infusing $25 million over the next 12 months.
Avendus, during mid-February, acquired a fast-emerging NBFC and is in the process of structuring the growth of this arm. Ranu Vohra, co-founder, MD & CEO, Avendus Capital, confirmed that they have recently acquired the NBFC and they will invest the $25 million over a period of an year as and when the loan book grows.
Investment bankers who are in the know further indicated that Avendus may look to raise Rs 200 crore through the private equity route to expand the NBFC arm. However, Vohra categorically said that they do not have any such plans and will fund the expansion of the NBFC arm from their internal accruals.
The area of NBFC has been attracting a lot of Indian and global majors with the likes of Kohlberg Kravis Roberts and Co (KKR) turning aggressive in India, besides their flagship private equity investments. In the recent past, V G Siddhartha-owned Coffee Day Group has been stepping on the gas to expand the NBFC operations as well.
The BFSI sector, which typically remains amongst the top three sectors with high private equity investments, has in the recent past reported a decline of 65 per cent in investments and 50 per cent in volume of deals. “While the Banking Amendment Bill was passed recently, bills such as FDI in insurance are still pending. We believe that guidelines for the new banking licences and positive measures such as deferment of the GAAR will help usher in positive sentiment. We think that while PE investments in BFSI or any other sector may not see a lot of action in the near future, there will be signs of improvement in the coming quarters,” Manoj K Kashyap, Leader, Financial Services, PwC India
This move by Avendus to beef up its NBFC arm comes just weeks after it announced the launch of its Avendus India Opportunities Fund III. The fund is registered with SEBI as Alternate Investment Fund (AIF) in Category III.
With an expected size of Rs 500 crore, the fund will use a private equity approach to invest in high quality listed mid-cap companies. The fund will focus on sectors which benefit from India’s rising discretionary spending, rapid urbanisation and increasing rural prosperity. The fund will invest in 12-14 high conviction mid-cap stocks, taking equity stakes of around 5 per cent for an investment horizon of two to three years.
