Poonawalla Fin likely to tap PEs

livemint.com:

MUMBAI : Poonawalla Fincorp Ltd might look at private equity (PE) investments for achieving its business targets, the company’s chairman Adar Poonawalla, said in an interview. After selling its housing finance business to TPG earlier this year, the group has enough headroom to pursue both organic and inorganic growth, he said. The leverage at present is quite modest—remaining below two times, Poonawalla added.

“It’s worth noting that within the NBFC sector, the typical leverage can extend four to five times. Looking ahead, there’s no immediate necessity for capital infusion to sustain growth. Our existing capital reserves are more than adequate to support our expansion over the next three to four years, as per the guidance given." However, in due course, depending on the requirement, the group may explore seeking strategic funds and partners to achieve its business goals, he added.

“We retain the option to secure primary capital for the company, opening doors to potential collaboration with valuable strategic investors, PE funds, and partners, but not in the immediate, short term." Rising Sun Holdings Pvt. Ltd, a Poonawalla Group entity, bought controlling stake in non-banking financial firm Magma Fincorp in July 2021, and renamed it Poonawalla Fincorp, to foray into financial services, and has been investing in it for growing the business. However, it had sold the housing finance business to global PE company TPG in a ₹3,000 crore transaction.