Bain Capital buys Gautam Adani’s stake in Shadow Bank

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US private equity group Bain Capital has agreed to buy Indian billionaire Gautam Adani’s entire stake in the so-called shadow bank, as the infrastructure billionaire focuses on core businesses after short-seller onslaught.

Bain did not disclose how much it paid for Adani’s 90 per cent stake in Adani Capital and Adani Housing Finance, but said it would invest $170 million through primary capital and debt to make the non-bank lender a “standalone company”.

It is the first time that the tycoon has sold his entire stake in a company since US-based short seller Hindenburg Research published a scathing report on Adani’s group in January, alleging accounting fraud and share price manipulation. Adani has denied the allegations.

According to the filing, six-year-old shadow bank Adani Capital, specializing in lending to small and medium-sized businesses, and home loan provider Adani Housing Finance were earlier owned by holding company Adani Finserv Pvt.

Former Macquarie investment banker Gaurav Gupta will remain chief executive and managing director while retaining his 10 per cent stake in the businesses. He declined to comment on the deal.

In a statement, Adani said Gupta “wanted to be an entrepreneur and I supported him”. “I am very pleased that a credible investor like Bain Capital is now stepping in.”

India’s second-richest man’s vast business empire – which stretches from coal mining to data centers and TV channels – is reeling as a short-seller report slashed the market value of Adani’s listed companies by nearly $150 billion at their lowest point, forcing Adani to cancel a $2.4 billion share sale.

To reassure its bankers, the Adani family has sold part of its stake in its listed businesses, including power and green energy units. Adani Group said in a statement this month that these sales helped repay share-backed debt of $2.15 billion till March and ensured “higher capital availability at the group level”.

Bain Capital is the second high-profile US investor to buy into Adani’s empire following the short-seller attack. Florida-based GQG Partners has invested $3.19 billion in four listed Adani companies.

Adani Capital’s services range from loans to supply-chain financing for farmers buying tractors. According to Bain Capital, it has more than 170 branches across India.

Bain Capital “shares our vision of providing affordable finance to our clientele”, Gupta said in a statement. With Ben’s capital commitment, “we are now poised to quadruple from here,” he said.

Get Free Indian Business & Finance Updates

we will send you one myFT Daily Digest Latest Email Rounding Indian Business and Finance News every morning.

US private equity group Bain Capital has agreed to buy Indian billionaire Gautam Adani’s entire stake in the so-called shadow bank, as the infrastructure billionaire focuses on core businesses after short-seller onslaught.

Bain did not disclose how much it paid for Adani’s 90 per cent stake in Adani Capital and Adani Housing Finance, but said it would invest $170 million through primary capital and debt to make the non-bank lender a “standalone company”.

It is the first time that the tycoon has sold his entire stake in a company since US-based short seller Hindenburg Research published a scathing report on Adani’s group in January, alleging accounting fraud and share price manipulation. Adani has denied the allegations.

According to the filing, six-year-old shadow bank Adani Capital, specializing in lending to small and medium-sized businesses, and home loan provider Adani Housing Finance were earlier owned by holding company Adani Finserv Pvt.

Former Macquarie investment banker Gaurav Gupta will remain chief executive and managing director while retaining his 10 per cent stake in the businesses. He declined to comment on the deal.

In a statement, Adani said Gupta “wanted to be an entrepreneur and I supported him”. “I am very pleased that a credible investor like Bain Capital is now stepping in.”

India’s second-richest man’s vast business empire – which stretches from coal mining to data centers and TV channels – is reeling as a short-seller report slashed the market value of Adani’s listed companies by nearly $150 billion at their lowest point, forcing Adani to cancel a $2.4 billion share sale.

To reassure its bankers, the Adani family has sold part of its stake in its listed businesses, including power and green energy units. Adani Group said in a statement this month that these sales helped repay share-backed debt of $2.15 billion till March and ensured “higher capital availability at the group level”.

Bain Capital is the second high-profile US investor to buy into Adani’s empire following the short-seller attack. Florida-based GQG Partners has invested $3.19 billion in four listed Adani companies.

Adani Capital’s services range from loans to supply-chain financing for farmers buying tractors. According to Bain Capital, it has more than 170 branches across India.

Bain Capital “shares our vision of providing affordable finance to our clientele”, Gupta said in a statement. With Ben’s capital commitment, “we are now poised to quadruple from here,” he said.