Clix Cap Likely to Buy Religare’s Hsg Finance Arm
Deal, which could be sealed by Sept-end, may help Religare tide over a cash crunch
New Delhi: Clix Capital, the commercial lending and leasing company run by former GE India executives Promod Bhasin and Anil Chawla, is likely to buy Religare Housing Development Finance from Religare Enterprises for about ₹ 600 crore.
Religare Enterprises, which owns an 87.5% stake in the housing finance firm, is divesting its ownership in various companies to tide over a cash crunch. The group recently sold its stake in its insurance venture to private equity firm True North for about ₹ 1,300 crore.
“The negotiation with Clix Capital is in the final stage and Religare is looking at concluding the deal this month or latest by September-end,” said a person involved in the negotiations. Clix Capital is expected to value the housing finance company at a little over three times its net worth, he added.
A Religare spokesperson said the company “would not like to comment on market speculation”. Clix Capital partner Bhasin called it a “rumour”.
In 2016, Bhasin formed a consortium with Chawla and private equity firm AION Capital to buy GE Money Financial Services. It was then renamed Clix Capital. AION Capital Partners, a PE fund sponsored and run by Apollo Global and ICICI Venture, is the main financial backer for Bhasin and Chawla. Bhasin is a former chief executive of BPO major Genpact while Chawla had quit as the head of GE’s commercial finance business in India to run hedge fund DE Shaw’s local operations a decade ago.
Religare Housing Development Finance had a loan book of ₹ 850 crore at the end of March 2016. It reported a profit before tax of ₹ 28.7 crore for fiscal 2016, the latest period for which numbers are available.
Religare Enterprises is a flagship company of Malvinder and Shivinder Mohan Singh in the financial sector. The promoters own nearly 51% of the company. In addition,
Clix Capital is run by former GE India executives &
PE AION Capital Partners is the main financial backer
Clix likely to value the Religare Housing Development Finance at a little over 3 times its net worth the two brothers also have a controlling stake in Fortis Healthcare, one of the leading hospital chains.
The cash-starved group is in the process of selling stakes in various companies, including Fortis Healthcare. It had entered into exclusive talks with Malaysia-based IHH Healthcare to sell Fortis Healthcare and SRL Diagnostics. However, IHH pulled out of the talks.
The promoters have so far sold an about 20% stake in Fortis Healthcare in the last six months for about ₹ 2,000 crore. The proceeds were utilised to repay loans and interest of the holding company, RHC Holding, said another person familiar with the development.
The group has initiated the divestment exercises at two levels. The holding company, RHC Holding, is engaged with various suitors to divest the stake in Fortis or SRL Diagnostics. Secondly, the listed entity, Religare Enterprises, the holding company for the financial businesses, is selling its ownership in various subsidiaries to raise funds, which will be used for funding its non-banking finance businesses, particularly those housed under Religare Finvest.