AION, former GE executives to buy GE Capital's finance unit
MUMBAI: AION Capital Partners (AION), an Indiafocused special situation fund, along with former GE Capital executives Pramod Bhasin and Anil Chawla, will acquire the financial service businesses of GE Capital India, the company said on Wednesday.
While the financial details of the deal have not been disclosed, a person close to the transaction said the transaction is valued at between $300 million and $350 million. The business comprises auto leasing, healthcare financing and corporate lending and leasing.
Bhasin was formerly the head of GE Capital in India and Asia, having earlier worked with GE Capital in the US. He started GE Capital's businesses in India. Bhasin started GE Capital International Services which subsequently became Genpact Ltd, where he was the president and chief executive officer until 2011. Genpact is currently listed on the NYSE.
Chawla was the head of the commercial business operations of GE Capital India. The AION Fund, with approximately $825 million in committed capital, was established by ICICI Venture and Apollo Global Management Llc. Last year, AION Capital had invested Rs.600 crore to buy an undisclosed stake in Varun Beverages Ltd, a leading manufacturer of beverages in India and the bottlers of Pepsi in India. AION Capital has also invested in Jyoti International, Avantha Holdings and Mytrah Energy.
Private equity investors remain bullish on the banking, financial services and insurance (BFSI) sector. According to a recent Bain & Co. report, PE investments in the BFSI segment doubled in 2015 to $3.7 billion from $1.9 billion in 2014.
"The private equity interest in the financial services space remains very high, although they are valuing the assets more conservatively mirroring the global and Indian economic environment," said Rajeev Suneja, partner, financial services, at advisory firm EY India.
Started in 1993, GE Capital's non-bank finance company operations in India have served more than 10 million corporate and consumer finance customers, the company statement said. In India, GE's financial services business has a joint venture with State Bank of India for credit cards, while GE Capital handles consumer finance through GE Money and also runs the commercial finance business.
Parent company GE has been in process of selling the businesses of GE Capital across geographies. On Tuesday, GE completed the previously announced sale of the majority of its North American commercial lending and leasing businesses to Wells Fargo and Co.