Existing shareholders mount counter offer to keep control of Clix Capital

Existing shareholders Pramod Bhasin and Anil Chawla, who hold a 15 per cent stake, have mounted an employee-backed buyout for Aion Capital's 85 per cent stake, challenging Protium Finance's bid

The battle for control of mid-sized non-banking financial company (NBFC) Clix Capital has taken a new turn, with existing shareholders Pramod Bhasin and Anil Chawla making a binding counter offer last week to buy out Apollo Global Management-managed Aion Capital’s 85 per cent stake at a valuation of Rs 2,400 crore.

 

Bhasin and Chawla collectively hold the remaining 15 per cent stake.

 

According to merchant bankers aware of the deal, a consortium led by Bhasin and Chawla has mounted an employee-backed buyout of the Gurugram-based Clix Capital, which specialises in loans for MSMEs. A number of the NBFC's executives and employees are said to have committed to investing their own capital for the buyout. The Bhasin-Chawla duo has also roped in institutional partners to help finance their bid.

 

The binding offer does not have any deadline of validity.

 

Chawla, a former managing director of US-based hedge fund D E Shaw India Advisory Service, and Bhasin, former chief executive officer (CEO) and president of leading IT and software consultancy Genpact, made the offer weeks after Mumbai-based NBFC Protium Finance entered into exclusive negotiations in July to buy out Aion's stake at a valuation estimated between Rs 1900 crore and Rs 2200 crore.

 

Email queries sent to Chawla, Ankit Dugar, director in Clix Capital and principal in Apollo Global Management, and Protium Finance partner Peeyush Misra remained unanswered at the time of publication.

 

In 2016, Bhasin and Chawla teamed up with Aion Capital to buy out GE Money Financial Services, and renamed it Clix Capital. GE sold the business as part of its move to get out of several non-core businesses in India.

 

With assets under management of around Rs 8,000 crore, Clix Capital has 28 branches across the country with over 1000 employees. It is one of the market leaders in K-12 schools' financing, MSME loans, as well as loans against property.

 

In India, US-based alternative investment managers Apollo Global had tied up with private equity firm ICICI Venture  Management to set up a 50-50 joint venture as Aion Capital. However, the JV was eventually dissolved - Clix Capital would be the last investment from which they would exit - in their first maiden US $825 million fund.

 

Clix has been on offer-for-sale since 2014 when Apollo mandated Barclays and Moelis to start the process to offload their 85 per cent stake. However, despite a number of suitors, such as TVS Capital and Ugro Capital, a deal could not be finalised due to differences over valuation and business strategy.  

 

The NBFC also made some interesting moves. In 2020, for instance, it made a non-binding offer of amalgamation with Laxmi Vilas Bank (LVB) after the Reserve Bank of India (RBI) had rejected the bank's plan to merge with Indiabulls Housing Finance. But the deal did not fructify because LVB merged with DBS Bank. In 2021 it made another attempt of a merger with Suryadoy Small Finance Bank but that did not work out, either.

 

• Shareholders Anil Chawla and Pramod Bhasin make a binding counter offer to buy out 85 per cent stake of Apollo managed Aion in Clix Capital.
• Apollo has been looking for a buyer for its 85 per cent stake since 2024
• No deadline for offer validity.  
• Protium Finance started exclusive negotiations for the same stake in July.
• Chawla and Bhasin rope in Clix executives and employees who pitched in to invest in what is a management buyout.
• Garnered support from institutional investors