Bain Capital to sell the L&T Finance stake via Block Deal

The US-based private equity major Bain Capital shares of L&T Finance, held by other entities, by diluting its stake through a block deal. The proposed block deal has been launched, with investor bank BNP Paribas as the advisor. 

The plan:

Bain Company has planned to sell a 3.54% stake in the company, at Rs. 169.17 apiece via its affiliates BC Asia Investment VI and BC Asia Growth Investment. Last year too, in September 2023, Bain sold 2.82% shares of the company for Rs. 900 Cr. Then, the shares were sold at Rs. 130/- apiece. Until then, through its affiliates Bain Capitals held a 4.04% stake in L&T Finance which then reduced to 1.2%. As of March 2024, BNP Paribus also held a 2.43% stake in the company.  Based on the current market capitalization of L&T finance the 3.54% stake is valued at Rs. 1500 Cr. It is also said that the floor price of the block deal is fixed at Rs. 169.17/ share, a 0.85% discount to its last closing price of Rs. 170.62/share on Wednesday. The sale is scheduled for today. 

L&T Financials and stocks:

L&T Finance in FY24 recorded an all-time high annual PAT of Rs. 2320 Crores, up by 43% YoY, and a quarterly profit of Rs. 554 Crores, up by 11% YoY. The company’s Net Interest Income(NII) for FY24 stood at Rs. 7115 Crores against Rs. 6368 Crores in FY23, up 12% YoY. The company, at the end of FY24, claimed to have a strong retail franchise of Rs. 80,037 Crores as well. At the close of today, the shares of the investment company recorded a 52-week high of Rs. 179.18 on the NSE. 

Conclusion:

Amidst the news of a block deal by 2 major investors, shares of L&T Finance have surged by 5% in intra-day prices to Rs.179.