Warburg Pincus’ Capital First raises ₹340 cr from GIC affiliate

Capital First, a non-banking finance company (NBFC) majority owned by private equity firm Warburg Pincus, has raised fresh equity capital of ₹340 crore from an affiliate of GIC, Singapore. The company offers SME loans, loan against property to Indian MSME players and also provides other loans.

Capital First is to allot 47.80 lakh shares to Caladium Investment Pvt Ltd, Singapore’s sovereign wealth fund. The allotment will be on a preferential basis at ₹712.70 per share, face value of ₹10 each, subject to approval of shareholders, the company said in a statement.

Global investment firm GIC has well over $100 billion in assets under management (AUM). The firm manages Singapore’s foreign reserves.

The company has been looking to diversify its loan book into several retail segments and has been considering inorganic growth options. It is learnt that Warburg Pincus has been pushing for diversification. Post-transaction, the total capital (including Tier 1 and Tier 2) of the company will increase to ₹3,263 crore on a consolidated basis and the capital adequacy will increase to 21.6 per cent.

For the recently concluded quarterly results, Capital First reported a profit after tax of ₹57.6 crore, an increase of 40 per cent from ₹41 crore in Q2 FY16, the highest ever quarterly profit in the history of the company. The company’s AUM grew 32 per cent to ₹17,937 crore as on September 30, 2016, on a year-on-year basis.

V Vaidyanathan, Founder & Chairman, Capital First, noted in a statement that the firm was “delighted to receive a firm proposal from Caladium to become a new shareholder of the company, who will provide growth capital to the company... Following this transaction, the Capital Adequacy Ratio will increase to 21.6 per cent from 19.1 per cent, which will help the company continue its future growth plans.”

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