India Alternatives & IIFL’s NBFC arm buy 4% of CIBIL for around $10M

Private equity firm India Alternatives and its parent IIFL Holdings' (formerly India Infoline) NBFC arm India Infoline Finance Ltd have together picked 4 per cent in India’s oldest credit information bureau Credit Information Bureau (India) Ltd (CIBIL), as per a statement.

Further terms of the transaction were not disclosed but sources said it involves stake purchase from one of CIBIL's existing investors SBI. SBI held 10 per cent stake prior to the latest transaction.

Although the deal value remains under wraps, VCCircle learns it is around Rs 60-62 crore ($10 million). This values CIBIL at around Rs 1,550 crore, 3 per cent more than what Aditya Birla PE valued it when it picked 4 per cent in the company last year.

India Alternatives picked 3 per cent in this deal.

“Credit scoring and self-evaluation in India will eventually become more of a retail product with consumers seeking self-assessment credit reports from bureaus before applying for loans. Rising customer awareness and increased credit transparency will allow customers to take advantage of better CIBIL stands to benefit from the deepening of credit penetration in India,” says Shivani Bhasin Sachdeva, MD and CEO, India Alternatives.

This is the third deal by India Alternatives Private Equity Fund and the first since IIFL's unit IIFL Wealth Management acquired a majority stake in the PE firm last August.

India Alternatives currently manages India Alternatives Private Equity Fund or India Alt Fund, which had an initial commitment of Rs 230 crore. It chases mid-stage growth capital deals.

It was founded by Shivani Bhasin Sachdeva, who continues to lead the unit under IIFL as MD and CEO. The PE firm was previously sponsored by Centrum Capital’s promoter Chandir Gidwani who had invested his proprietary capital.

India Alt Fund has made two investments starting with its debut transaction in 2010-11 in Mumbai-based company Ideacount Education Pvt. Ltd, which provides media and entertainment training and related services.

Two years ago India Alt Fund had co-invested with India Evolving Fund, a fund managed by Faering Capital, in Bangalore-based Gokaldas Intimatewear Pvt. Ltd, which manufactures underwear garments and offers products under the brand name Enamor.

Meanwhile CIBIL, which already counts a string of investors, gets a new backer.

Last year Punjab National Bank, Central Bank of India, Standard Chartered Bank and Sundaram Finance sold their stake to US-based financial services group TransUnion International Inc, which now owns 55 per cent stake in the firm.

TransUnion managed to increase its stake after the government increased the foreign direct investment limit in credit information companies to 74 per cent from 49 per cent. The firm has been an investor in CIBIL since 2001.

Other shareholders of CIBIL include Bank of Baroda, Bank of India, HSBC, Union Bank of India and Indian Overseas Bank (each with 5 per cent stake); Aditya Birla PE (4 per cent); ICICI Bank and SBI (6 per cent each).

(Edited by Joby Puthuparampil Johnson)

Leave Your Comment(s)