Bain Capital sells $410 million stake to Axis Bank in block deal

Bombay : Private equity investor Bain Capital will sell a 1.24% stake in private lender Axis Bank Ltd on Tuesday in a block transaction, which is expected to net the investor $410 million, according to terms of the agreement seen by Mint.

Bain Capital holds a 4.24% stake in Axis Bank as of September 30 through three entities – BC Asia Investments VII, BC Asia Investments III and Integral Investments South Asia IV.

Under the terms of the agreement, BC Asia Investments VII sells a 1.24% stake at a floor price of Rs.888, a 2% discount from the last closing price of Rs.906 per share.

JP Morgan is the broker for block trading.

Bain Capital had taken the stake in Axis Bank in November 2017, investing Rs 6,854 crore in the bank.

Indian stock markets have seen a wave of block trades by private equity and venture capitalists over the past few months as investors reduced their holdings amid a brief recycling seen in the markets.

Private equity firm KKR sold a Rs 9,185 crore stake in Max Healthcare in the biggest PE block deal seen in Indian stock markets to date, while Blackstone sold large stakes in two of his positions – a Rs 4,000 crore stake in the automaker. Sona BLW Precision Forgings and Rs2,650 crore in Embassy Office Parks. Others like Tiger Global, Temasek and TPG have also sold their stakes in listed companies in recent months.

Even several promoters have jumped on the bandwagon to sell some of their holdings. The promoters of Triveni Turbine sold a Rs1,600 crore stake in the company to several investors, while Biocon Ltd sold a Rs1,200 crore stake in Syngene to raise funds.

Axis Bank, the third largest private sector lender in India, reported consolidated net profit of 5,330 crore, up 70% for the quarter ended September 2022, from 3,133 crores in the prior year quarter.

The lender’s net interest income increased 31% year-on-year to 10,360 crores of 7,901 crores in the last quarter of the year.

Net interest margin (NIM) for Q2FY23 was 3.96%, up 57% year-on-year.

The bank reported improving asset quality in the September quarter. The gross non-performing asset rate fell to 2.5% as of September 30, 2022, from 2.76% a quarter ago and 3.53% a year ago.

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