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    Brookfield may buy majority stake in IndoStar

    Synopsis

    Deal likely at about 10% premium to the current market price of the finance company

    Indostar-1200Agencies
    Mumbai: Canada’s Brookfield Asset Management is in talks to acquire a majority stake in Mumbai-based IndoStar Capital Finance, said two people with direct knowledge of the matter. The asset manager focussed on alternative assets could either buy the promoters’ stake in the finance company, owned by Everstone Capital and Goldman Sachs, or subscribe to preference shares by the firm, the people said. The deal could also be a mix of promoter stake sale and preference share allotment, they said.

    “The deal is in the last stage of finalisation and could be announced in the next few days,” said one of the person involved in the deal. An email query sent to Everstone Capital and Brookfield Asset Management did not elicit any response till the time of going to press.

    The deal is likely to be executed at about 10% premium to the current market price, according to one of the two people in the know. IndoStar Capital, which soared 10% to Rs 260.45 on Friday, has run up 34% in the last five trading sessions.

    Promoters owned 60.74% stake in the company as on December 31. IndoStar Capital Mauritius, a special purpose vehicle (SPV), held 57% stake in the finance company as on December 31. Everstone Capital is the lead investor in the SPV, and its other partners include global financial powerhouses such as Goldman Sachs and Baer Capital.

    IndoStar Capital came out with initial public offer (IPO) in May 2018 to raise about Rs 2,000 crore, out of which Rs 700 crore was fresh capital to augment its capital base and while the rest gave the investors a partial exit. Shares of the IndoStar Capital listed on May 21, 2018 at Rs 600 per share as against the offer price of Rs 572.
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    Everstone Capital and Goldman Sachs made returns over five times their initial investments after they partially sold their stakes in the IPO. Both had invested about Rs 900 crore in the company in 2011. Since the IPO, IndoStar shares have declined nearly 57%. The nonbanking finance company had acquired IIFL’s commercial vehicle assets under management for Rs 3,620 crore along with its employees and 161 branches.



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    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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