Bain Capital to sell 1.24% stake in Axis Bank for $410 million

American Private Investment company Bain Capital is planning to sell a 1.24 percent stake in Indian private banking company, Axis Bank for 410 million dollars. Axis Bank based in Mumbai Maharashtra is one of the largest private banks in the country.

Bain Capital which became a shareholder of Axis Bank in 2017 currently holds a 4.24 percent stake in the banking company through three affiliate entities, namely BC Asia Investments VII, BC Asia Investments III, and Integral Investments South Asia IV. A private equity firm purchased a stake in Axis Bank in November 2017 for 6854 crore Indian rupees.

The private equity firm plans to sell a stake in Axis Bank on November 1, 2022, in the form of block deals that would be brokered by the international financial institution, JP Morgan Chase. News reports state that each share of Axis Bank will be sold at a floor price of 888 rupees which is 2 percent lesser than the closing price of the stock. Stocks of Axis Bank had closed at 906 rupees per share on Monday.

Despite the economic slowdown and fears of a global recession, Axis Bank on 20th October announced that the banking company witnessed a 70 percent increase in its net profit on year to year basis in the September quarter. The net profit of the company increased by 29 percent when compared to the previous quarter.

Its net interest income (NII) went up by 31 percent YoY to Rs 10,360.3 crore, from Rs 7,900 crore in Q2FY22. It was Rs 9,384 crore in Q1FY23. Its net interest margin (NIM) was at 3.96 percent, which is a rise of 57 bps YoY and a 36 bps rise QoQ.

Various private equity firms and venture capital investors are selling their stakes in Indian financial institutions in the hope of posting profits from the share sales. Indian capital markets have been through an upcycle in the past few weeks despite facing strong global headwinds from other capital markets.

Reports suggest that private equity firm KKR sold a ₹9,185 crore stake in Max Healthcare in the largest PE block deal in the Indian stock markets so far. International Investment company, Blackstone sold large stakes in two of its positions – a ₹4,000 crore stake in auto parts maker Sona BLW Precision Forgings and ₹2,650 crores in Embassy Office Parks.