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A clutch of large global private equity (PE) players have evinced interest to buy a controlling stake in Destimoney Enterprises (formerly known as Dawnay Day AV Financial Services), a retail financial services and distribution company, wholly owned by PE firm New Silk Route (NSR).
According to sources, PE majors General Atlantic (GA), Actis and Advent International have started discussions with NSR for the buyout.
NSR is looking at a valuation of $200-$250 million (Rs 1,200-1,500 crore) for its Rs 200-crore investment in Destimoney made in 2008. Destimoney also owns a 49 per cent stake in Punjab National Bank's (PNB) housing finance arm Punjab National Bank Housing Finance Ltd (PNBHFL).
Dawnay Day AV Financial Services was launched by mutual fund industry veteran Alok Vajpeyi as a joint venture with Dawnay Day International, the financial services unit of UK-based Dawnay Day Group. After buyout in 2008, NSR changed the name to Destimoney.
"It is GA's policy not to comment on deals we may or may not be considering," said a General Atlantic spokesperson.
J M Trivedi, south Asia head of Actis, said the company does not comment on market speculation.
An Advent spokesperson said the company does not comment on rumours.
An email questionnaire sent to NSR did not elicit any responses.
PNBHFL, which provides loans to purchase and construct residential premises, saw a substantial growth in its loan book. Its loans outstanding stood at Rs 10,591 crore at end of March 2014, up from Rs 6,619 crore a year ago. Its interest income jumped by 67 per cent to Rs 1,076 crore in FY14 from Rs 642 crore in FY13.
PNBHFL's profit grew to Rs 127 in 2013-14 from Rs 91 crore 2012-13. The gross non-performing assets were down 44 basis points to 0.32 per cent at the end of March 2014.
According to an ICRA report dated December 2013, PNBHFL would require approximately Rs 1,000 crore of additional capital in the medium term in order to meet its growth plans. The company intends to grow at a three-year compounded annual growth rate of 42 per cent.
In November 2013, PNB infused Rs 204 crore in PNBHFL, while Destimoney was expected to invest their share by February 2014.
A senior PNB executive said, "It (the sale process) will bring in a player who will provide stability, bringing in experience on governance and business strategy. It would help to give long-term support."
NSR, an Asia-focused growth capital firm founded in 2006 with $1.4 billion assets under management, has been in discussions with investors to sell its stake in various portfolio companies. Last year, Business Standard had reported NSR's plans to sell its 80 per cent in 9X Media, a leading music television network.
Besides 9X, NSR's key investments in India include Coffee Day Resorts and Hotels, Capricorn Hospitality, KS Oils, Ascend Telecom Infrastructure, Reliance Infratel, Nectar Lifesciences, Varsity Education, VRL Logistics, Adigas and Moshe's Fine Foods.
According to media reports, NSR also plans to exit its investments in Varsity Education and Nectar Lifesciences.
