US-based Carlyle Group close to acquiring Destimoney from New Silk Route

The deal, learnt to be in the Rs 1,000-cr range, is expected to be signed soon

After year-long discussion to sell its portfolio company, Destimoney Enterprises (formerly Dawnay Day AV Financial Services), private equity (PE) firm New Silk Route Advisors (NSR) is set to sign a deal with US-based Carlyle Group. According to people in the know, Carlyle has outbid the GIC-ChrysCapital consortium.

The deal, learnt to be in the Rs 1,000-crore range, is expected to be signed soon. In November 2014, Business Standard had reported that the exit of the Punjab National Bank (PNB) chairman and managing director (CMD) affected the sell-out discussions between the promoters of Destimoney and PE investors.

Destimoney, wholly-owned by NSR, holds a 49 per cent stake in Punjab National Bank Housing Finance Ltd (PNBHFL).

A senior PNB executive said, "The process of short-listing a new financial partner is almost over, with Carlyle at top. But in the absence of full-time head for PNB, there is no clarity as to when the deal will be closed."

In October last year, K R Kamath had quit as CMD of PNB, after completing a five-year tenure. Kamath, who had another 13 months left to reach 60 years, was expected to get an extension. The position remains vacant.

A Carlyle spokesperson said, "As a policy, Carlyle does not comment on market speculations."

Darius Pandole, partner, NSR, refused to comment.

Other PE majors such as General Atlantic, Actis and GIC-ChrysCapital were also in discussions with NSR for acquiring Destimoney, which had a wide exposure to the loan books of PNBHFL. Destimoney was launched by mutual fund veteran Alok Vajpeyi as a joint venture with Dawnay Day International, financial services unit of UK-based Dawnay Day Group. NSR changed the name from Dawnay Day AV Financial Services to Destimoney in 2008, after it acquired the company for Rs 200 crore.

PNBHFL saw its profits grow 54 per cent to Rs 87 crore in the six months ended September 2014, compared to Rs 57 crore during April-September 2013. It provides loans to purchase and construct residential premises and had debt portfolio of Rs 13,733 crore as on September 30, 2014, against Rs 8,502 crore a year earlier, a 62 per cent growth.

The individual loan portfolio grew 51 per cent at Rs 8,696 crore in the 12 months ended September 2014 from Rs 5,747 crore at the end of September 2013. Deposits grew 97 per cent to Rs 2,958 crore from Rs 1,505 crore a year earlier.

As reported by Business Standard two weeks ago, NSR is in the process of exiting its various investments in 2015. It will partially exit from VRL Logistics and Ortel Communications through an initial public offering.

NSR's major investments in India include Moshe's Fine Foods, Kiran Energy, Vasudev Adiga's Fast Food, Nectar Lifesciences, Cafe Coffee Day, KS Oils and Ascend Telecom Infrastructure.