Bain Capital to Acquire Majority Stake in Adani Capital and Adani Housing, Gaurav Gupta Remains MD

• ByStartupStory     |    July 24, 2023

Top global private equity firm Bain Capital has entered into a definitive agreement to acquire a 90 percent stake in Adani Capital and Adani Housing. The deal will involve purchasing 100 percent of the Adani family’s private investments in the company, while Gaurav Gupta, the current Managing Director and CEO, will retain his stake and continue in his leadership role.

In a statement, Rishi Mandawat, a Partner at Bain Capital, expressed confidence in Adani Capital’s business fundamentals and its ability to address the substantial unmet retail MSME credit demand in India. He said, “Gaurav and the team have built a scale lending business that supports entrepreneurialism and is trying to solve the $300 billion+ unmet retail MSME credit demand in the country. The company has strong business fundamentals, an experienced team, with the ability to serve and expand to core segments like agriculture, housing, and underbanked rural areas. We see compelling opportunities to partner with Gaurav and team to support and facilitate Adani Capital’s next phase of growth by providing access to significant capital, strategic and operating resources, and deep experience partnering with financial services businesses in India and across the globe.”

Gautam Adani, Chairman of the Adani Group, praised Gaurav Gupta’s entrepreneurial spirit and the success of Adani Capital in supporting underserved communities in semi-urban and rural India. He said, “I have known Gaurav since his days as an investment banker. He wanted to become an entrepreneur, and I backed him. He has not only built a good financial services business with a focus on the underserved in semi-urban and rural India but has also valuably contributed to the Adani Group. I am very happy that a credible investor like Bain Capital is stepping in now, and this will help the business grow manyfold from here.”

Gaurav Gupta expressed gratitude to Gautam Adani for the opportunity and the freedom to build a successful financial services business. He said, “It has been an extraordinary six years; to have the capital, a strong brand and, more importantly, the freedom to build a business is perhaps unprecedented – and for this, I thank Gautambhai for the opportunity and for his faith in me. Our aim has always been to support micro-entrepreneurs and first-time homeowners in Bharat and to be the most economical and convenient lender to our customers by leveraging technology. The team and I are very pleased to welcome a partner like Bain Capital who shares our vision of making affordable finance available to our customer segment with a strong focus on customer literacy and education. With Bain Capital committing Rs 1,000 crore of capital in the company, we are now equipped to grow 4x from here.”

The rise of entrepreneurialism and increasing consumption rates across India are driving a significant increase in the volume of MSMEs, which now constitute an important segment of the Indian economy, contributing approximately 30 percent of its gross domestic product, according to the Ministry of Micro, Small & Medium Enterprises. Despite their potential, only 10 percent of MSMEs in India have access to a formal source of credit to support growth aspirations, particularly more acute in rural areas. Adani Capital was founded in 2017 to democratise access to affordable, convenient lending solutions and support the next generation of MSMEs and entrepreneurs in India. To realise that vision, Adani Capital has built an AUM of nearly $500 million, a network spanning more than 170 branches across eight states, and a team of over 2,500 professionals who expound its “customer-first” culture.

Avendus Capital was the exclusive financial advisor to Adani Capital, Adani Housing Finance, and their shareholders on this transaction. Rothschild was the exclusive financial advisor to Bain Capital on this transaction.

Bain Capital’s track record in investing to foster the growth and leadership of a diversified set of financial services businesses in India and across the globe, including Axis Bank, 360One (fka IIFL Wealth), Judo Bank, L&T Finance Holdings, Legacy Corporate Lending, and more, has positioned them as an experienced partner in this venture.

The transaction is expected to close in Q4 2023, pending necessary regulatory and market approvals.

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