INSUBCONTINENT EXCLUSIVE:
Five years after investing into ace deal maker Nimesh Kampani's non-banking finance company (NBFC) for real estate investing, former
Citigroup CEO Vikram Pandit, Govt of Singapore Investment Corp (GIC), and promoters of JM Financial Services are putting in about Rs 875
crore in JM FInancial Credit Solution.
The fund infusion into the NBFC of the Mumbai-based investment banking firm comes when the sector in
India is facing a perceived downturn.
As per the agreement, Pandit and GIC together will invest 50 percent of the fresh capital, while JM
Financial (JMFL) will invest Rs 225 crore
The rest is the capital raised from university endowments such as University of California Endowment Fund and large foreign institutions,
said one of the sources briefed about the transaction
The fund-raise is at a post-money equity valuation of up to Rs 7,175 crore.
The transaction shall increase the net worth of JMFCSL by 50%
and further strengthen the balance sheet of JMFCSL to meet its growth requirement, the Mumbai-based firm said in a statement.
JMFL will
retain board and management control of JMFCSL.
Vikram Pandit, who was chief executive of Citigroup from 2007 to 2012, has previously
invested Rs 540 crore in the company in 2014
After his five-year stint in Citi, Pandit, who hails from Nagpur, has invested in JM and bought a three percent stake in JM Financial
GIC entered the Indian real estate market over a decade ago, but has turned aggressive only recently and has been actively picking up stakes
in properties and forming alliances with Indian developers for future developments
Estates and Brigade Enterprises
various equity issuances so far this year
In February, the company raised Rs 650 crore through a qualified institutions placement
In addition, JMFL Group has raised equity funds of Rs 729 crore from external investors in its group companies to further strengthen their
balance sheets and capitalize on business opportunities.
The fund-raise is coming at a time when NBFCs have been struggling with liquidity
slackness in PSU bank growth appetite, strong loan demand, largely stable retail asset quality and a benign liquidity environment
While most of these factors continue to be supportive, we believe there is reason to expect a turn in the liquidity environment driven by
concerns of rising inflation and twin deficits (CAD and fiscal deficit)
This is already reflected in rising bond yields recently, and we worry this can undermine the strong NII growth expectations of some of the
Sensex, which ended 0.6 percent lower.
