Advent to pick Rs 1,000 cr of ABCL's Rs 2,100-cr QIP issue

Global private equity major Advent International along with existing investor Premji Invest have committed to pump Rs 1,100 crore into Aditya Birla Capital, which is raising Rs 2,100 crore through a preferential issue. Of the committed fund, Advent will pick up 4.15 percent stake for a consideration of Rs 1,000 crore, while Azim Premji's PE arm Premji Invest will pump in Rs 100 crore.

The company's board Thursday approved the proposal to mop up Rs 2,100 crore in equity capital through a preferential allotment to marquee investors, and to the promoters, and promoter group entities and the money raised will be used for future growth as well as to repay outstanding debt. The company has entered into a definitive share subscription agreement with Jomei Investments, an affiliate of Advent, for Rs 1,000 crore funding, it said, adding it has also signed a similar agreement with PI Opportunities Fund, an affiliate of Premji Invest for the Rs 100-crore commitment.

Post-this deal, Azim Premji's PE, which is already an investor, holding in the company will rise to 4.11 percent. The promoters Grasim Industries will be investing Rs 770 crore as part of the issue, while other promoter group entities will contribute Rs 230 crore, which will together hold about 70.54 percent in ABCL on the completion of the issuance," it said.

This is in proportion of the promoters' and promoter group entities' inter-se shareholding in the company. The subscription price of Rs 100 per share is at a premium of 5.79 percent over the floor price as per Sebi regulations. "The equity capital will be raised at Rs 100 a share, which is at a 10.62 percent premium to the closing price of Rs 90.40 as of September 4 and is subject to customary closing conditions, including regulatory and shareholder approvals," the company said.

Chief executive Ajay Srinivasan said the investment reflects recognition of a marquee global investor like Advent and the continued commitment and conviction of Premji Invest. The company has an aggregate AUM of over Rs 3 lakh crore, a lending book of Rs 62,000 crore across its NBFC and housing finance businesses, and gross written premium of over 8,000 crore.

Advent since 2007 has deployed over USD 1 billion in several domestic companies across sectors like financial services, consumer products, healthcare, industrial and technology..