A non-bank lender backed by Gautam Adani, Asia’s richest person, is planning to raise at least 15 billion rupees ($188 million) in an initial public offering in Mumbai that could take place as early as 2024. Adani Capital’s first-time share sale will offer about a 10% stake in the shadow bank and target a valuation of around $2 billion, Managing Director and Chief Executive Officer Gaurav Gupta said.
“If you are listed then your ability to raise incremental capital is higher,” Gupta said in an interview in Mumbai, where the lender to farmers and small and medium-sized businesses is based. A small player in the country’s finance sector despite sharing a chairman with one of India’s biggest conglomerates, Adani Capital is looking to capture more of the market for loans from 300,000 rupees to 3 million rupees using technology.
“We are not a fintech company, but a credit company which is leveraging technology to acquire or underwrite customers more effectively,” said Gupta. The lender uses a direct-to-customer distribution model and 90% of the business is self-generated, he said. Gupta joined up with Adani in 2016 after two decades in banking at firms including Nomura Holdings Inc. and Rothschild & Co., most recently serving as Macquarie Group Ltd.’s head of India investment banking.
The Indian tycoon’s financial unit launched in 2017 and has started small, reporting net income of about 163 million rupees in the year ended March 31, 2021, according to its 2020-2021 annual report. That’s still a jump from the previous year, when the coronavirus pandemic exacerbated the country’s shadow banking crisis.
The firm has 154 branches in eight states and about 60,000 borrowers, said Gupta, who owns a minority stake in the company. It currently looks after about 30 billion rupees of loans, he added, and pegged the gross non-performing assets at about 1%. “My plan is to double the loan book every year,” he said.