Large overseas private equity (PE) firms, such as the $376-billion Carlyle Group, local investors such as Renuka Ramnath's Multiples Alternate Asset Management, and Japan-based financial services company Credit Saison are among investors that have expressed interest in buying up to 49 per cent stake in BoB Financial Solutions - the credit card arm of Bank of Baroda (BoB), according to a report by business daily Economic Times.
The Expression Of Interest (EOIs) were submitted earlier this month and are now being reviewed by the bank to shortlist names for the second phase of the process, which will be opened for a limited number of bidders. Those making the second short-list will get access to more detailed information on the company and its management team, the report added.
Also Read: BoB looking to raise foreign currency fund via bonds
BoB has also asked valuers to submit proposals for valuing BoB Financial. ICICI Securities is the adviser to BoB on the deal. According to sources quoted in the report, it is still early days for the transaction and the due diligence of the prospective bidders will take time.
BoB Financial and SBI Card were only the two bank-led NBFCs to be given a credit card licence. However, despite receiving a licence in 1994, full four years ahead of SBI Card, the company has not only lagged behind its PSU peers but also other smaller private sector lenders that started the business much later. BoB is now banking on stepping up its cross-selling to its customers and also open market acquisition and digital sourcing to increase its credit card base.
Carlyle had initially taken a 26 per cent stake in SBI Card after US giant GE Group exited the partnership in 2017. The PE firm completely exited SBI Card last year, the report added.
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