Private equity major ChrysCapital is increasing its bet on the Indian banking sector. The private equity firm has acquired nearly 4 per cent stake in Tamil Nadu-based Karur Vysya Bank Ltd for Rs 160 crore ($31.3 million as per the current exchange rate). This comes even as it is increasing stake in another private sector lender, ING Vysya Bank.
A ChrysCapital entity picked up shares on both Bombay Stock Exchange and National Stock Exchange on Friday as markets slipped considerably after the budget. The PE firm acquired 4.2 million shares in Karur Vysya Bank, translating to approximately 3.92 per cent stake, according to exchange data.
The shares of Karur Vysya closed at Rs 372.85 a unit on the BSE, down 2.23 per cent. ChrysCapital bought the shares at Rs 379.99, nearly 2 per cent premium to the closing price. Other investors in Karur Vysya Bank include GMR Group (4.93 per cent), Rakesh Jhunjhunwala (4.27 per cent) and Argonaut Ventures (1.03 per cent).
For the first nine months of FY12, Karur Vysya Bank reported 19 per cent increase in total net income to Rs 894.5 crore, with net profit rising 20 per cent to Rs 35.49 crore.
Separately, ChrysCapital has also increased its stake by over 1 per cent in Bangalore-based ING Vysya Bank to 3.7 per cent during Q3 FY12. This stake hike has been done for Rs 45-50 crore, according to VCCircle estimates. ChrysCapital has been buying shares in ING Vysya Bank since last year, where it also invested in its QIP, along with ICICI Venture and Kotak Private Equity. ChrysCapital had also invested in ING Vysya Bank in 2004 and exited in late 2009, with an estimated 1.5x-2x returns.
In the past also, the Delhi-based PE firm made good returns on its investments in Yes Bank, Axis Bank and Centurion Bank of Punjab.
Another bank which has recently attracted private equity interest is Development Credit Bank Ltd (DCB). It is now raising Rs 100 crore from Tano Capital, TVS Capital and Wolfensohn Capital Partners.