US-based private equity giants TPG Capital and KKR & Co. Inc. are running ahead in the race to acquire a 20% stake worth up to Rs 4,000 crore ($527 million) in Piramal Group’s proposed pharmaceutical entity that would combine the group’s pharma businesses.
TPG’s bid is larger than that of KKR, two people familiar with the development told Mint.
The pharma businesses will be demerged from Piramal Enterprise Limited and combined into a new entity, 20% of which will be owned by one of the two private equity players cited above, while at least 25% will be owned by the public and the remainder by promoters.
Piramal Group’s overall pharma business may be valued at $2.5 billion (Rs 18,974 crore) upon the completion of the deal.
The talks are at an early stage and might not result in a deal due to Covid-19.
But the time is right for Piramal due to three reasons.
One, Piramal Group is in need of capital to repay promoter-level debts.
Two, they want to inorganically expand the pharma business globally.
Three, the surge in demand for pharma, healthcare products and services can help the group to dictate a premium from potential investors in the pharma business.
Separately, Hinduja Group-promoted IndusInd Bank has initiated talks with sovereign wealth funds and pension funds, including Canada Pension Plan Investment Board (CPPIB) and Singapore’s GIC Pte. Ltd, to raise up to $500 million (Rs 3,790 crore at current exchange rate), persons in the know told Mint.
Last week, it was reported that the bank is in talks with marquee global investors such as Blackstone, Apax Partners, General Atlantic, Advent, TPG and Carlyle to raise “confidence capital”.
More than two-thirds of the bank’s market value has been wiped off since the beginning of March.
Promoter stake at IndusInd Bank stands at 14.68% as against the maximum regulatory limit of 15%.
Promoters have shown interest in bringing additional capital into the bank, but any such effort will require the approval of the central bank.
A large dose of capital infusion in the near term is essential for the bank to stem the erosion of its market capitalisation as well as to boost its business, which has seen large depositors withdraw money from the bank and rating agencies taking a negative view of the bank’s future performance.
Meanwhile, the deadline for submission of bids for troubled Dewan Housing Finance Corporation (DHFL) has been extended by 21 days to 7 May 2020, persons close to the development told Financial Express.
Previously bidders had requested to extend the deadline due to the ongoing Covid-19 21-day lockdown that began on 25 March.
Among the 24 applicants that had submitted the expressions of interest (EoIs) for DHFL, 22 have been shortlisted.
KKR India Financial Services, Welspun Group, Adani Group, Oaktree Capital, Asset Reconstruction Company (India) Limited and Bain Capital were among the suitors that placed EoIs for the entire business.
On the other hand, 10 companies submitted EOIs for part of the business.
