Singapore-headquartered private equity fund Everstone Capital founded by former Goldman Sachs bankers Sameer Sain and Atul Kapur is poised to make a full exit of its existing stake in Hinduja Group's non-banking financing arm, Hinduja Leyland Finance, sources with knowledge of the matter told Moneycontrol.
"Everstone is in the last lap of selling its existing 7% stake in multiple tranches to the promoter entities of Hinduja Leyland Finance and exit its six-year-plus investment in the NBFC arm,” a source told Moneycontrol.
"Final agreements have been sealed and an official announcement on the proposed transaction is expected shortly, " added a second source.
The Hinduja group's flagship company commercial vehicle manufacturer Ashok Leyland, Hinduja Power Limited and Hinduja Automotive are the promoter entities of Hinduja Leyland Finance.
"Everstone had been looking at an exit via the IPO route for the past few years, but two previous listing attempts by Hinduja Leyland Finance failed due to unfavourable market conditions followed by the NBFC liquidity crisis which hit the markets. The promoters are not in a hurry to go in for an IPO and will wait for the desired valuations, but as an investor, Everstone was keen to exit and is exploring the same for some of its other portfolio companies. Even earlier partial stake sales by Everstone have been struck with the promoter group,” said a third source.
In July 2013, Everstone, had picked up a 15% stake in Hinduja Leyland Finance for Rs 200 crore. Moneycontrol could not independently verify the deal valuation for the exit.
Hinduja Leyland Finance had first filed its draft red herring prospectus with Sebi in May 2016 and planned to raise Rs 500 crore of primary capital.
“Owing to the uncertainty in the economy on account of demonetisation, the IPO slated for Q3 last year was postponed," the company later said in July 2017. The second attempt was made in June 2018, approvals were secured in September but the plans were deferred again due to the bleak sectoral outlook.
Everstone is focused on India and South East Asia and has assets in excess of $5 billion across private equity, real estate, green infrastructure and venture capital. It has invested in more than 30 portfolio companies in the region and its India portfolio includes fast-food chain Burger King (which has received the Sebi nod for an IPO), Indostar Capital Finance, nutraceutical ingredient player OmniActive Health Technologies and Modern Foods.
Hinduja Leyland Finance finances a wide range of commercial and personal vehicles, which include medium and heavy commercial vehicles, light commercial vehicles, small commercial vehicles, cars, multi-utility vehicles, three-wheelers, and two-wheelers, as well as various kinds of used vehicles.
As of March 31, 2018, its operations included 349 branch offices and 1,550 business locations spread across 23 states and two union territories.
Moneycontrol is awaiting responses to email queries sent to Everstone and the Hinduja Group and we will update this article as soon as we hear from them.