U.S. private equity firm Bain Capital’s recent acquisition of 90% of Adani Capital and Adani Housing in India highlights its focus on serving the “underbanked” sectors of the country’s economy. The deal aims to tap into the growing market of micro, small, and medium enterprises (MSMEs), which contribute around 30% of India’s GDP. Despite this significant contribution, only 10% of these enterprises have access to formal credit sources for their growth, according to Bain. The deal provides a lending platform to address this gap, targeting areas like micro SMEs, agriculture, and affordable housing.
Bain’s $120 million primary capital injection and $50 million liquidity line through non-convertible debentures emphasize their commitment to supporting Adani Capital’s growth. The Adani Group’s non-banking financial arm, Adani Capital, initiated its lending operations in 2017. The acquisition comes after a challenging period for the Adani Group, marked by allegations of stock manipulation and fraud, leading to a decline in Gautam Adani’s net worth.
While the Adani Group’s turmoil may have prompted questions about its impact on the deal, Bain Capital clarified that Adani Capital was a non-core asset for the conglomerate. Bain’s partnership with Gaurav Gupta, who will retain a 10% stake and continue as managing director and CEO, underlines their commitment to driving the business’s success. The acquisition is set to conclude in the fourth quarter, pending regulatory approvals. This move highlights the strategic efforts by international investors to tap into India’s evolving economy and address critical financial gaps, aiming to foster growth and innovation in underserved sectors.
