MC EXCLUSIVE An emotional townhall, tag-along option and more: Finer details of the Avendus - Mizuho deal

Avendus co-founders Ranu Vohra, Gaurav Deepak and Kaushal Aggarwal

In what is the second big deal between a Japanese and an Indian company in the financial services space, Mizuho Securities is all set to take a majority, controlling stake in Avendus Capital. The deal, which had been in the works for many months, was announced in the early Wednesday morning.

US private equity major, KKR, also the key exiting investor, in the first stage is likely to sell its entire 57 percent stake in Avendus Capital to Mizuho Securities, the capital markets subsidiary of Japan’s Mizuho Bank.

Sources familiar with the matter add that the private equity firm has also made an offer to acquire the shares held by Ranu Vora, one of Avendus’ co-founders, who has around a 7 percent holding in the company.

With Vora’s exit, the initial stake acquired by Mizuho is expected to rise to about 64 percent, giving it clear majority ownership even before considering other shareholder exits.

Emotional Townhall

The closure of the transaction was communicated internally through a town hall session, where all the co-promoters addressed employees to announce the deal and respond to concerns around continuity and the firm’s future.

"It was a very emotional moment for us," said a person who was part of the townhall. "It's literally marking a new phase for us". The meeting saw several employees and promoters reflecting on Avendus’ journey and the transition in ownership.

It is understood that the management assured employees that there would be no change in the firm’s operations or its day-to-day functioning following the transaction. "This was the main message delivered in the townhall, that nothing really changes," said the person cited above.

Gaurav Deepak, co-founder and CEO, and Kaushal Aggarwal, co-founder, who oversees the credit solutions and wealth management businesses, will continue to remain at the helm of the company. The third founder, Ranu Vora, who was the public face of Avendus in its early years, is expected to exit as part of the transaction.

That said, the final say on any major business and/or investment will vest with Mizuho post the deal completion and the Japanese major will hold the veto on important decision making aspects.

Regulatory approvals for the transaction are expected to take between nine and 12 months, the sources cited said, indicating that the formal completion of the deal will happen sometime in 2026.

Offer to Other Shareholders

Meanwhile, it is learnt that KKR has extended a tag-along offer to other shareholders of Avendus, including institutional investors, who are expected to exercise the option. This primarily includes Gaja Capital and Yogesh Mahansaria, founder and CEO of Alliance Tire Group, holding about 20 percent stake collectively in the i-banking outfit.

However, people aware of the transaction said that even if some investors choose not to tender their shares, Mizuho will still retain majority control of the company following the first phase of the deal, and it won't alter the dynamics of the transaction.

KKR Considered Various Options

Moneycontrol was first to report that Mizuho was poised to close in on a deal to acquire a majority stake in Avendus Capital from KKR.

Since 2022, KKR had been evaluating multiple exit routes, including a potential initial public offering, before opting for a full exit through a secondary sale to a strategic investor earlier this year.

Formal bids were invited in December 2024, with Carlyle, Nomura and Mizuho emerging as key contenders. The sources cited said Mizuho’s offer, valuing Avendus at roughly $700 million, or Rs 6,000-6,200 crore, was the highest, making it the frontrunner for most of the process.

Mizuho’s proposed acquisition of Avendus would mark another significant Japanese investment in India’s financial services sector, following Sumitomo Mitsui Banking Corporation’s emergence earlier this year as the single largest shareholder in Yes Bank after buying out stakes held by SBI and other investors.