Rajiv Rattan, who co-founded Indiabulls Group at the turn of the century before moving out three years ago, has partnered US-based private equity firm Lone Star Funds to jointly invest $400 million (Rs 2,600 crore) in his non-banking financial company RattanIndia Finance Pvt. Ltd.
As part of the deal, Rattan and affiliates of Lone Star will own 50% stake each in RattanIndia Finance, which aims to lend money to businesses and individuals.
The development comes more than a month after a VCCircle report that Rattan was in final funding talks with the US-based private equity and real estate investment firm.
Rattan’s non-banking financial company has received all regulatory approvals and is already deploying capital. It has set up offices in Delhi and Mumbai.
RattanIndia Finance aims to be a key lender to companies and small to medium businesses. “The firm will also focus on steadily building a retail platform that extends across India,” said Rattan, chairman and chief executive of RattanIndia Finance.
Reflecting on the deal, Mark Newman, president of Lone Star Asia Acquisitions, said Lone Star is investing at a time when companies across India face challenges in obtaining funds via traditional bank channels.
Lone Star invests globally in real estate, equity, credit and other financial assets. Since its inception in 1995, it has set up 17 private equity funds with total capital commitments of over $70 billion.
In 2017, Lone Star had formed a $550 million joint investment platform with the private equity arm of Infrastructure Leasing and Financial Services Group for stressed infrastructure projects in India.
Rattan, Sameer Gehlaut and Saurabh Mittal had started Indiabulls Group at the turn of the century. In 2014, they divided the group. Gehlaut retained bulk of the business, including financial services and real estate operations, while Rattan took control of the power and infrastructure arms. Rattan is now chairman of RattanIndia Power Ltd and RattanIndia Infrastructure and Power Ltd, formerly known as Indiabulls Power Ltd and Indiabulls Infrastructure and Power Ltd, respectively. Mittal runs his own investment firm called Mission Holdings.
RattanIndia Finance, under RattanIndia Group, may compete in certain segments with the diversified conglomerate Indiabulls Group, now led by Gehlaut.