SME lending: YES Bank ties up with US-based OPIC, Wells Fargo

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YES Bank has teamed up with the Overseas Private Investment Corporation (OPIC) and Wells Fargo on an agreement to lend up to $150 million to small and medium enterprises (SMEs) in India.

Under the agreement, OPIC will provide $75 million in financing and up to $75 million in syndicated financing jointly with Wells Fargo to YES Bank.

Specifically, $50 million of the financing will be used to expand support to women-owned businesses, while another $50 million will be used for financing SME businesses in low-income States, YES Bank said in a statement.

It added that this will ensure access to funding for women-owned businesses and SMEs in India.

OPIC is the US government’s development finance institution. San Francisco-headquartered Wells Fargo is a diversified, community-based financial services company with $2 trillion in assets.

Rana Kapoor, Managing Director and CEO, YES Bank, said: “This facility will support financing to women entrepreneurs in India for driving future economic growth and job creation.”

Dev Jagadesan, OPIC’s Acting President and CEO, said, “OPIC’s facility will help YES Bank expand its SME lending capacity, specifically enabling them to reach both women and entrepreneurs in low-income States who have much to contribute to India’s economic activity.”

According to the statement, this is the third transaction between OPIC and YES Bank and comes close on the heels of last year’s $265-million OPIC facility, which the bank will use to extend SME financing in India.

The private sector bank said it has also partnered with International Finance Corporation and Women Entrepreneurs Opportunity Facility by drawing a $50-million loan in March 2016 for mobilising capital for women entrepreneurs.

 

Source: http://www.thehindubusinessline.com/money-and-banking/sme-lending-yes-bank-ties-up-with-usbased-opic-wells-fargo/article9768685.ece

PE exits set to see new record through IPOs this year

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With RBL Bank and Aster DM Healthcare planning to raise Rs 1,500 crore and Rs 1,600 crore, respectively, through initial public offerings (IPOs) this year, private equity investors are set to make a record exit using the primary market route.

According to Prime Database, a Delhi-based financial services firm providing research on IPOs, the first six months of the year saw PE investors exit stakes worth Rs 2,993 crore across six IPOs. These include small finance bank Equitas raising Rs 2,176 crore through IPO in April. Twelve PE investors including International Finance Corporation and Sequoia Capital sold stake worth Rs 1,454 crore in the issue, making part or full exit.

The first six months of the year has already seen more PE exits through IPOs than the annual record of Rs 2,346 crore across 12 IPOs in 2015.

“The value of exits is related to the size of the company looking to list and in recent times, we have seen larger companies coming to the market,” said Subhrajit Roy, executive director and head (equity capital markets origination) at Kotak Investment Banking. “Investors are increasingly focusing on post-listing liquidity, which is enhanced by a higher free float. The average deal size has been increasing to adhere to this requirement,” said Roy.

While Ratnakar Bank’s IPO will see PE funds Gaja Capital and Capvent India making part exits, that of DM Healthcare will see India Value Fund and Olympus Capital paring their stake. Another PE-backed company, Varun Beverages, has also planned to raise Rs 1,000 crore through an IPO this year by providing liquidity platform for its PE investors AION Global and Standard Chartered Private Equity. “The PE activity over the past few months was characterised by an increase in buy-outs, the restart of investments in infrastructure projects especially roads, PE-backed IPOs and continued robustness in fund raisinPE exits set to see new record through IPOs this yearg,” said Mayank Rastogi, partner and leader for PE at consulting firm EY.

“Owing to the strong listing performance of PE-invested firms in the past 12 months, a long list of IPOs is being lined up amongst PE-invested companies,” said Rastogi.

PE exits set to see new record through IPOs this year. Increasing PE exits through IPOs is also credited to the performance of secondary markets. Sensex, the benchmark index of the BSE, has risen four per cent to 27,167 this year. Also the average price-to-earnings ratio for 30 Sensex companies is 20.13 now, against five-year average of 17.93. This has given PE-backed companies an opportunity to provide their investors’ exit through the IPO route.

“As the broad secondary markets remain buoyant, we will see more and more PE-backed IPOs where the investor would make only partial exits,” says Pranav Haldea, managing director at Prime Database Group. “PEs want to keep their skin in the game as they expect secondary markets to do better from hereon.”

Source: http://www.business-standard.com/article/specials/pe-exits-set-to-see-new-record-through-ipos-this-year-116070600752_1.html