Binding bids for KKR-backed Avendus Capital likely soon

(From left): Avendus co-founders Ranu Vohra, Gaurav Deepak and Kaushal Aggarwal

The race to acquire a controlling stake in Avendus Capital is likely to have reached its closing stages.

Binding bids to acquire US private equity major KKR’s 63 percent stake in Avendus may come in by end of November or early December, according to sources aware of the matter.

A few other investors in the home-grown financial services firm, including Gaja Capital and Yogesh Mahansaria, founder, and CEO of Alliance Tire Group, are expected to sell their stake along with KKR.

It is not clear yet whether all the founders — Ranu Vora, Gaurav Deepak and Kaushal Aggarwal — would exit their stakes (roughly at about 6-7 per cent each) along with KKR or one or two of them will retain their holdings.

Avendus was founded in 1999 Vohra, Deepak and Aggarwal.

Four major strategic investors – namely Japan’s Mizuho Financial Holdings, Nomura, PE major Carlyle, and a south based family office are said to have evinced interest in Avendus. Among the four, Mizuho which does not have significant presence in India yet, is said to be in forefront to pick up controlling stake in Avendus. This was reported by Moneycontrol on October 15.

KKR’s stake is likely to be picked up for a consideration of approximately Rs 4,500 crore, thereby pegging the valuations of Avendus upwards of Rs 7,000 crore.

“We are still in the process and cannot comment on specifics”, said an official spokesperson of Avendus when asked for confirmation on the ongoing transaction.

Meanwhile, it is also learnt that efforts for a management buyout, led by Gaurav Deepak, CEO, Avendus Capital, may be on the backburner. “In all probability we see a strategic investor taking controlling stake in Avendus,” said a person aware of the development.

“Initially, the preference was to rope in a few financial investors. A strategic sale was not the first port of call. But that hasn’t progressed much as pooling together a consortium financial investors has hit a road for reasons of valuations differences and issues pertaining to control among others,” said a banker aware of the matter.

KKR acquired a 58 percent stake in Avendus Capital, best known for its expertise in investment banking, back in 2015 and by 2017 took its stake to 63 percent.