Private equity firm Warburg Pincus is buying a minority stake in Computer Age Management Services Pvt. Ltd (CAMS) from mortgage lender HDFC Ltd and HDFC Bank.
HDFC said in a stock-exchange filing that it has agreed to sell a 6.3% stake in CAMS to Warburg Pincus affiliate Great Terrain Investment Ltd for Rs 209.50 crore ($32.7 million). After completion of the sale, the HDFC will hold a 4.8% stake in CAMS, it said.
HDFC added that its associate HDFC Bank is also selling a part of its stake in CAMS to the PE firm at the same price. It didn't disclose the stake the private-sector bank is selling.
The deal values CAMS, a mutual fund registrar and transfer agent, at Rs 3,325 crore ($520 million).
According to VCCEdge, the data research platform of News Corp VCCircle, HDFC Group owned a 23.17% stake in CAMS as of March 2017. Promoter group Acsys Investment Pvt. Ltd held a 31.83% stake while NSE Strategic Investment Corporation Ltd had 45%.
The company’s total income was Rs 502.6 crore and profit after tax stood at Rs 127.1 crore in the year through 31 March 2017.
It caters to the asset management industry and has partnered with insurance companies, private equity funds and financial services firms to offer them technology enabled services.
Early this week, the prolific private equity firm investing in India through global funds, has hit the final close of its financial sector fund at $2.3 billion (around Rs 14,725 crore).
Warburg Pincus Financial Sector Fund was launched in June 2017 with a target corpus of $1.6 billion.
Warburg Pincus has already invested in Indian financial services firms such as AU Small Finance Bank, Capital First, HDFC and Kotak Mahindra Bank, among others. In July, it picked up a 9% stake in ICICI Lombard General Insurance for $282.71 million.
Financial services investing has been a large and important contributor to its fund returns over many years and the fund is looking for growth opportunities in the financial services and financial technology opportunities across the globe.
The PE firm invests in the country out of its global fund Warburg Pincus Private Equity XII LP.
Recently, the PE firm agreed to pick up a 20% stake in Bharti Airtel’s DTH arm for $350 million.
Warburg Pincus has more than $44 billion in private equity assets under management. Founded in 1966, the New York-based firm has raised 17 private equity funds which have invested more than $60 billion in over 800 companies in more than 40 countries.