Bain Capital to Sell Stake via Block Deal in Axis Bank
Private investment firm Bain Capital is reportedly preparing to sell its stake in Axis Bank through a block deal, potentially offering the shares at a discounted rate. The Boston-based company is said to have engaged in negotiations for the sale on Thursday.
According to a report by ET NOW, approximately 18.9 million shares of Axis Bank were exchanged in the block deal. As a result, the bank’s shares experienced a minor decline of over 1% during early trading on Thursday as investors sought to secure profits. The block deal took place at around 9:30 am, involving more than 1.37 million shares.
Bain Capital is expected to sell its 0.75% stake in the private lender at a slightly reduced price compared to the closing rate on Wednesday, as per The Economic Times. The proposed offer price range is set between Rs 964 and Rs 977.70 per share, indicating a discount of up to 1.4% relative to the previous closing price of Rs 977.70.
A deal term sheet reveals that Bain Capital will offload 22.5 million shares, potentially resulting in proceeds of Rs 21.63 billion to Rs 21.88 billion ($264 million to $267 million), the report further highlights.
As of March 31, 2023, the Bain Capital entity BC Asia Investments VII held a 1.3% stake in Axis Bank.
Back in November 2017, a consortium led by Bain Capital, based in Boston, infused $1.8 billion (approximately Rs 116.26 billion) of “confidence capital” into Axis Bank to fortify the institution’s financial position following a series of disappointing financial results.
During the fundraising initiative, equity shares were issued at a price of Rs 525 per share, while convertible warrants were issued at Rs 565 per share. Bain Capital’s investment in the private sector bank totaled around Rs 68.54 billion.
Having reached a 52-week high of Rs 989.70 on Tuesday, Axis Bank shares have experienced a second consecutive decline. The stock has dipped by 1.3% in the two subsequent trading sessions.
The momentum indicator MFI for Axis Bank currently exceeds 70, signaling an overbought condition, while the RSI stands at 68, suggesting a gradual approach towards overbought territory. A reading above 70 indicates that the stock is trading in the overbought zone.
About Axis Bank:
Axis Bank Limited, previously named UTI Bank (1993–2007), is a Mumbai-based Indian banking and financial services firm. It holds the position of the third-largest private sector bank in India in terms of assets and the fourth-largest in terms of market capitalization. The bank offers a range of financial services to large and mid-sized companies, as well as SMEs and retail businesses.
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