Private equity heavyweights Blackstone, Advent International, Kedaara Capital, and Warburg Pincus are competing to acquire up to 100% of Axis Finance in a deal that could be valued between $800m and $1bn.

The sale process, currently in the due diligence phase, is expected to draw binding offers by the end of September, according to individuals with direct knowledge of the matter.

Axis Bank, India’s third-largest private lender, initiated the sale of its non-banking financial subsidiary in response to proposed Reserve Bank of India (RBI) rules. The regulations require banks to cut their stake in subsidiaries like NBFCs to 20% or less within two years, and to avoid overlaps in group lending businesses.

Morgan Stanley is advising on the process. Previous restructuring options, including a reverse merger or IPO, were deemed unviable.

Axis Finance manages a diversified loan portfolio spanning corporate, real estate, MSME, and retail segments. As of December 2024, it reported ₹36,962 crore in AUM and a capital adequacy ratio of 21.22%. Its revenue for the first nine months of FY25 nearly matched its full-year FY24 revenue of ₹3,154 crore, while profit after tax stood at ₹494 crore.

The transaction would mark another major private equity play in India’s NBFC space, following EQT and ChrysCapital’s $1.15bn deal for HDFC Credila and TPG’s ₹3,900 crore acquisition of Poonawalla Housing Finance.

As firms sharpen their focus on India’s fast-evolving lending sector, Axis Finance’s robust financials and diversified book make it a strategic target for global investors.

Source: Mint

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