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IDFC Bank, Capital First explore merger; ICICI Venture may back Go Fashion

10 January, 2018

IDFC Bank and non-banking financial company Capital First Ltd are exploring the possibility of a merger, The Economic Times reported, citing two people aware of the development.

Top executives of both the companies have received merger proposals from investment banks but the matter has not reached their boards for discussions, the report said.

If the merger goes through it will help Capital First enter the banking sector while IDFC Bank will get a retail franchise, the report cited an unidentified person as saying.

The development comes barely months after IDFC Group and Shriram Group, in October 2017, called off a proposed merger of some businesses after failing to agree on the deal structure and valuation.

In another report, The Economic Times reported that ICICI Venture, the private equity arm of ICICI Bank, is set to buy a 13.8% stake in Chennai-based apparel firm Go Fashion India Pvt. Ltd for about Rs 100 crore.

Go Fashion, which was founded in 2010, makes women’s legwear under the brand Go Colors.

The deal will value Go Fashion at Rs 725 crore, the report said, citing two people aware of the development.

This is nearly four times the valuation at which Sequoia Capital had acquired a 33.33% stake in the company for Rs 60 crore in November 2014, as per VCCEdge, the data research arm of News Corp VCCircle.

Last year, VCCircle had reported that Go Fashion was in talks with a clutch of private equity firms for its Series B round of funding.

Meanwhile, private-sector lender Axis Bank is looking to acquire a life insurance business and is in talks with IDBI Federal Life Insurance and Tata AIA Life Insurance Company, The Economic Times reported, citing people aware of the development.

The bank has hired a US-based investment bank to look for a possible target among the mid-size insurance companies, the report added.

“It has already submitted a bid for IDBI Federal Life Insurance, which is on the block,” the report quoted a source as saying.

Axis Bank had also held initial talks with Max Life Insurance promoters but the talks didn’t progress due to differences over valuation, according to the report.

In November 2017, Axis Bank had raised Rs 11,626 crore ($1.8 billion) from global alternative investment firm Bain Capital, state-run Life Insurance Corporation and investment management firm Capital Group.

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IDFC Bank, Capital First explore merger; ICICI Venture may back Go Fashion

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