Nomura jumps into fray to acquire Avendus in a shift of role from adviser to bidder: Report

KKR, which owns a 63% stake in Avendus, is seeking a valuation between Rs 5,500-6,000 crore for its investment.

Japan's largest investment bank and broking firm Nomura has joined the race to acquire homegrown Avendus, which is owned by US equity major KKR, The Economic Times has reported. Initially appointed the sell-side adviser for the deal, Nomura has joined the fray as a third potential buyer, the report quoted sources as saying.

The shift follows growing Nomura’s growing interest in Avendus, with Japanese financial conglomerate Mizuho emerging as a leading contender alongside US-based private equity firm Carlyle.

With Nomura now actively pursuing the acquisition, KKR, which holds 63 percent in Avendus, is expected to appoint a new adviser, the ET said.

Moneycontrol couldn’t verify the report independently.

KKR is seeking a valuation between Rs 5,500 and 6,000 crore for its investment. Potential bidders, however, may propose a lower valuation, ranging from Rs 4,500-5,000 crore, the report said.

The due diligence phase is underway, with final offers expected by the end of the month.

Gaja Capital, a minority shareholder in Avendus, is likely to exercise its tag-along rights, allowing it to sell its stake under the same terms as KKR. Up to two-thirds of the company could be up for sale, depending on the final deal structure.

Neither KKR nor Nomura commented on the development, the report said.

Moneycontrol reported in February that KKR had revived the process to exit the leading home grown financial services firm and roped in a sell-side adviser.

KKR had in November 2015 picked up a controlling stake in Avendus Capital from existing investors.