GIC, CPPIB in talks to join Bain to buy 10% in Axis Bank

MUMBAI: Singapore’s sovereign wealth fund GIC Pte. Ltd and Canada Pension Plan Investment Board (CPPIB) are in talks to co-invest with private equity firm Bain Capital to acquire a 10% stake in Axis Bank Ltd.

According to multiple people aware of the development, it will be one of the largest private equity investments in the Indian banking sector.

The three global funds will invest about $1.9-$2 billion to acquire the combined 10% stake, one of the people said on condition of anonymity. While investors will get half the 10% stake in the form of preferential shares, the remaining 5% will be acquired from institutional investors through a secondary transaction, said the first person.

According to the first person, Bain Capital and other investors will do a deal similar to Bain’s 10% stake acquisition in L&T Finance Holdings Ltd, in 2015. As part of that deal, Bain Capital had acquired about 5.27% through preferential shares and warrants, and another 4.95% stake from parent firm Larsen & Toubro Ltd through an open market transaction.

GIC and CPPIB are so-called limited partners in Bain Capital. Investors in private equity and venture capital funds are called limited partners.

Bain has struck similar partnerships in its earlier bets such as Genpact Ltd and Hero MotoCorp Ltd.

Spokespersons for Axis Bank, Bain Capital and GIC declined to comment. An email sent to CPPIB did not elicit any response. GIC is already an investor in Axis Bank. CPPIB holds a 6% stake in another private bank, Kotak Mahindra Bank Ltd.

Axis Been has been keen to bring in a “marquee long term investor to boost confidence in the market and reputation in the wake of the recent drop of its asset quality,” according to a second person, who also spoke on condition of anonymity.