A dozen bidders have shown interest for the securities business of Infrastructure Leasing & Financial Services (IL&FS), including lenders HDFC Bank, ICICI Bank, Axis Bank and Rakesh Jhunjhunwala’s private equity firm Rare Enterprises, The Economic Times reported.
IL&FS’s new management is looking to sell parts of the defaulting company to pare its Rs 91,000-crore debt and IL&FS Securities Services (ISSL) is the first of its subsidiaries being sold. The company expects to raise Rs 400 crore through the sale, sources told the paper.
The Securities and Exchange Board of India (SEBI) had previously approved a deal for the sale of ISSL to IndusInd Bank, but the new management wanted a new and transparent bidding process.
The procedure for the deal started on November 12. “A shortlist will happen soon. The valuation of the company should be around IndusInd Bank’s offer of Rs 400 crore,” a source was quoted as saying.
ISSL was established in 2007. It posted a profit of Rs 45 crore on a revenue of Rs 324.5 crore for FY18, according to IL&FS’ annual report. The company reportedly has over 1,000 broker client accounts and foreign institutional investors. It engages in over 3 million transactions daily on stock exchanges.
For the sale, Arpwood Capital and JM Financial were appointed as financial and transaction advisors, while Alvarez & Marsal came in as the resolution consultant.