Preferential share issue: Aditya Birla Cap to raise Rs 2,100 crore from Advent affiliate, others

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Mumbai | Published: September 6, 2019 3:24:08 AM

The lender has entered into definitive share subscription agreements with Jomei Investments, an affiliate of Advent International, one of the largest global private equity investors, and PI Opportunities Fund, an affiliate of Premji Invest.

Aditya Birla Capital, equity capital, Aditya Birla Capital, Grasim Industries, Surya Kiran Investments, IGH Holdings, Pilani Investment, Advent International, PI Opportunities Fund, Premji Invest,Upon the completion of the issuance, Advent, through its affiliate, will hold approximately 4.15% of Aditya Birla Capital’s equity capital

Aditya Birla Capital on Thursday announced that it has received the board’s approval to raise equity capital aggregating to `2,100 crore through preferential issue of equity shares to certain marquee investors and promoter group entities.

The equity capital will be raised at `100 per share, which is at a 10.62% premium to the Aditya Birla Capital’s stock closing price of `90.40 as of Wednesday and is subject to customary closing conditions, including regulatory and shareholder approvals.

The primary equity capital will be raised through an investment of `1,000 crore by Jomei Investments, `100 crore by PI Opportunities Fund and `1,000 crore in aggregate by the promoter, Grasim Industries (`770 crore), and by promoter group entities (`230 crore). The promoter group entities include Surya Kiran Investments, IGH Holdings and Pilani Investment.

The lender has entered into definitive share subscription agreements with Jomei Investments, an affiliate of Advent International, one of the largest global private equity investors, and PI Opportunities Fund, an affiliate of Premji Invest.

Upon the completion of the issuance, Advent, through its affiliate, will hold approximately 4.15 % of Aditya Birla Capital’s equity capital, while Premji Invest, through its affiliates will hold approximately 4.11% of company’s equity capital. The later one already hold 8.29 crore share of the company. The promoter and promoter group entities will hold about 70.54 % in the company upon the completion of the issuance.

The subscription agreement, inter-alia, provides for some limited investment protection rights such as a board seat, anti-dilution rights, etc, to Jomei Investments, an affiliate of Advent International. Additionally, a privately held promoter group entity has agreed to provide Jomei Investments with tag-along rights in case of a fall in the shareholding of the promoter group below a defined threshold.

The funds raised will be utilised to fund the future growth of the company’s businesses as well as to repay outstanding debt, the lender said.

Shweta Jalan, managing director and head of India, Advent International, said, “Advent International’s long-term commitment to India remains robust and we believe that there is an exciting opportunity to invest into the financial services sector.” T K Kurien, managing partner & CIO, Premji Invest said, “Premji Invest is pleased to enhance and deepen its existing partnership with Aditya Birla Capital. We are confident about the value that the company is creating for all stakeholders.”

Aditya Birla Capital has aggregate asset under management (AUM) of `3 lakh crore and lending book of `62,000 crore across its non-banking and housing finance businesses.

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