Grapevine: TVS Capital, others may invest in Digit; Advent, Bain, GIC eye exit from Quest Global
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TVS Capital Funds, A91 Partners, and Faering Capital, among other mid-market private equity firms, are in advanced talks to invest up to $100 million (Rs 709 crore at current exchange rate) in online insurance startup Digit at a valuation of up to $900 million, three persons familiar with the development told The Times of India.

The startup was launched by insurance industry veteran Kamesh Goyal along with Canadian billionaire Prem Watsa’s Fairfax Holdings, which has invested over $140 million since 2017.

“The transaction is almost finalised and is awaiting regulatory approval,” said one of the persons mentioned above. Interestingly, senior and top mid-management are understood to be putting in $4-6 million in Digit, said another person.

Meanwhile, at a meeting on Tuesday, Yes Bank’s board is likely to reject an offer from Canada’s Erwin Singh Braich and Hong Kong-based SPGP Holdings to contribute $1.2 billion (Rs 8,509 crore at current exchange rate) towards fundraising, a person familiar with the matter told The Times of India.

Doubts over key foreign bidders have triggered concerns that the Reserve Bank of India might not allow them to take ownership stakes in the lender. The bank would prefer to have institutions rather than individual investors involved in its fundraising, said the person.

Separately, Yes Bank has signalled its reluctance to give approval to Coffee Day Group’s proposed sale of its Global Village Technology Park to private equity firm Blackstone Group Llp for Rs 2,800 crore ($395 million at current exchange rate), three people familiar with the sale process told Mint.

The sale proceeds were supposed to be used for repaying the debts of Cafe Coffee Day (CCD)’s associate firms and promoters, who have total debts of at least $1 billion and Yes Bank is the single-largest lender with an exposure of at least Rs 1,500 crore.

Among more than a dozen lenders, Yes Bank, which is dealing with its own liquidity crisis, is the only one yet to approve the deal with the New York-based private equity giant, the report said.

Yes Bank has put a condition for approval that Coffee Day should repay the entire loan taken by the group from the lender.

In another development, private equity firms Advent International, Bain Capital, and Singapore’s sovereign wealth fund GIC are in preliminary talks for a partial or full exit from engineering services provider Quest Global Services at a valuation of about $2.5 billion (Rs 17,727 crore at current exchange rate).

The funds are also weighing an option of a public listing in the US, through which the promoters of the company are also likely to trim their ownership, multiple persons in the know told The Economic Times.

The PE funds together own around 30% stake in the firm which was founded in 1997 by Ajit Prabhu and Aravind Melligeri.

Also, education tech startup Unacademy is in talks with new investors, New York-based private equity firm General Atlantic and global venture capital firm GGV Capital, to raise $100 million (Rs 709 crore at current exchange) in its Series E round at a valuation of $400 million, three people aware of the matter told Mint.

While the funding round is expected to close within the next six weeks, more investors, such as Singapore’s sovereign wealth fund GIC, could participate, said one of the persons.

Unacademy had last raised $50 million in a Series D round in June 2019 led by hedge fund Steadview Capital, along with existing investors Sequoia Capital, Nexus Venture Partners, SAIF Partners and Blume Ventures.

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