Asia’s richest man, Gautam Adani is now preparing to launch an initial public offering (IPO) of its non-bank lender Adani Capital after the success of FMCG subsidiary Adani Wilmar.
Adani Capital IPO Launch
With the launch of this issue, the NBFC is planning to raise approximately Rs 1,500 crore ($188 million).
It is expected to be launched in the start of 2024.
Reportedly, the Adani Capital’s first-time share sale will offer about a 10% stake in the shadow bank and target a valuation of around $2 billion, according to the Managing Director and Chief Executive Officer, Gaurav Gupta.
Gupta said, “If you are listed then your ability to raise incremental capital is higher,” during an interview in Mumbai.
Capturing Loan Market
It appears that Adani Capital aims to capture more of the market for loans from Rs 300,000 to Rs 3 million using technology.
While talking about the business, Gupta said that they are a fintech company, but a credit company which is leveraging technology to acquire or underwrite customers more effectively.
Further added that Adani Capital uses a direct-to-customer distribution model and 90% of the business is self-generated.
While giving more information about the company’s setup, he said, the firm has 154 branches in eight states and about 60,000 borrowers.
Presently, the bank looks after about 30 billion rupees of loan and pegged the gross non-performing assets at about 1%.
His plan is to double the loan book every year.
Entry In Financial Services
This move with Adani Capital heralds Adani Group’s entry into financial services.
The financial firm commenced lending operations in April 2017 and since then its business categorized into retail and rural financing.
Basically, it provides lending services in the Agri value chain such as farm equipment, small commercial vehicles, 3-wheelers, and farm loans.
Besides this, it also offers MSME business loans and trade and supply chain financing.
The firm is presently expanding its branch network in the states of Gujarat, Maharashtra, Rajasthan & Madhya Pradesh.
Coming to the numbers, Adani’s shadow bank posted a net income of about 163 million rupees in the year ended March 31, 2021, as per the 2020-21 annual report.
Which is clearly a jump from the previous fiscal as the coronavirus pandemic intensified the country’s shadow banking crisis.
Prior to this, Adani Wilmar is the latest Adani Group firm to enter stock exchanges.
It debuted in the market on February 8 this year and had launched its Rs 3,600 crore IPO from January 27 to January 31, and got oversubscribed by 17.37 times.
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