Apollo Global Management and Varde Partners are no longer considering bidding for Altico Capital India, according to people familiar with the matter, narrowing the number of suitors for the troubled shadow lender.
The firms pulled out because they were unwilling to meet creditor demands to inject as much as Rs 200 crore ($280 million) of fresh equity into Altico, two people said, asking not to be identified as the information is private.
A spokesman for Apollo confirmed its withdrawal while Varde declined to comment.
That leaves Cerberus Capital Management, SSG Capital Management, and Kotak Investment Advisors in the race for the real-estate focused lender, three people said. Cerberus, SSG and Kotak declined to comment.
Altico’s troubles follow a spate of defaults among Indian shadow banks over the last 16 months, making it harder for the sector to raise funds. The cash crunch is also spilling over into the broader economy, given that these lenders fund everything from the construction of condominiums to purchases of personal goods like cars and phones.
Apollo was only willing to inject part of the money creditors sought, while Varde wanted to wait for a turnaround in Altico before investing, two people said.