Temasek arm to buy 4.8% stake in AU bank

Camas Investments Pte Ltd., a wholly-owned subsidiary of private equity firm Temasek Holdings, will be picking up 4.81% stake in the Jaipur-based AU Small Finance Bank through preferential allotment of shares and convertible warrants for ₹1,000 crore.

Out of the ₹1,000 crore, ₹475 crore will come in June and the balance in December 2019, Deepak Jain, chief financial officer, AU Small Finance Bank, told The Hindu.

Other investors

At present, promoters hold 32% stake in the bank which will be diluted by 1.2% after the deal.

Other shareholders in the bank are Warburg Pincus, which has 15% stake, International Finance Corporation with 8% , Kedaara and ChrysCapital Investment advisors India with 4% each, among others.

AU Small Finance Bank — that started banking operations in 2017 — reported asset under management (AUM) growth of 49% year-on-year during the first year of operation.

The capital is raised to fuel further growth, Mr. Jain said.

“We are looking at 35-40% AUM growth for the next two years,” Mr. Jain said.

“We haven’t raised capital for a long time. We also wanted to maintain at least 18% capital adequacy ratio as compared to regulatory requirement of 15%,” he said. The lender’s capital adequacy ratio was 19.3% as on March 31 of which 18.4% was tier-I capital.

The bank had posted a net profit of ₹83 crore during January-March and ₹292 crore for the financial year 2017-18.