Bain Sells $448 Million Share in Indian Lender Axis Bank

Private equity firm Bain Capital has reportedly sold a $448 stake in India’s Axis Bank.

The company made the block trade Wednesday (Dec. 13), Reuters reported, citing a term sheet seen by the news outlet.

Reuters notes that it wasn’t clear how much of a stake Bain had in Axis, which the report describes as India’s third-largest private lender.

According to the report, Societe Generale, Goldman Sachs, UBS and Morgan Stanley were among the buyers of Bain’s stake in Axis Bank.

The report says that Bain — which purchased a 68.54-billion-rupee stake in Axis in November 2017 — has recently sold several collections of shares in the lender via block deals: a 0.7% stake in June of year as well as another stake last November.

Bain also this year purchased a majority stake in India’s Adani Capital and Adani Housing Finance, pledging $170 million to expand those operations amid a rise in demand for credit among consumers and boom in so-called “shadow banks,” or non-bank lenders.

As noted here in August, personal loans from traditional banks rose 19.2% between May 2022 and May of this year, while loans to consumers from non-bank lenders climbed 31.3% year-over-year, while lending by banks to shadow banks increased 27.6%.

However, India’s central bank recently instituted new rules designed to cut down on riskier lending to consumers after seeing a wave of smaller loans and a jump in delinquencies.

That led another lender, Paytm, to change its small-ticket loan policy, announcing last week that it would make fewer small loans — those below 50,000 rupees, or $600.

Instead, Paytm says it plans to build up its loan distribution business by offering a greater number of higher-ticket loans to consumers and merchants in the above-50,000 rupee category.

The company’s decision caused a number of brokers, including JPMorgan, Goldman Sachs and Citi, to downgrade Paytm, with the company’s stock dropping 20% and wiping out more than $1 billion in market value.

This year has seen Axis Bank team with Indian eCommerce marketplace Flipkart to launch a digitally enabled personal loan offering.

With this offering, Flipkart’s customers can get loan approval on Flipkart within 30 seconds and flexible repayment cycles of six months to 36 months.