Warburg Pincus, HDFC Standard Life to invest Rs178 crore in Capital First

Private Equity firm Warburg Pincus and HDFC Standard Life Insurance together will invest about Rs178 crore in Capital First, a non-banking finance company (NBFC).

Capital First, formerly Future Capital Holdings, will allot 83.6 lakh shares worth Rs128 crore to Cloverdell Investment, an affiliate of Warburg Pincus, and 32.5 lakh shares worth Rs 50 crore to HDFC Standard Life Insurance, the NBFC said in an exchange notification.

The two companies are subscribing up to 11.6 million shares on a preferential basis at a share price of Rs152.80. The fund-raising, however, is subject to Capital First's shareholder approvals.

"Post this transaction the capital adequacy ratio, which is already strong at 21.35 per cent as of December 2013 will increase to 24 per cent. The company grew assets under management by 29 per cent during the 12-month period ended December 31, 2013, and this incremental capital will position Capital First to continue funding its future growth plans," V Vaidyanathan, Chairman and Managing Director said.

Post this transaction, the company's total Tier I capital will rise to Rs1,298 crore,and its total capital including Tier 1 and Tier 2 capital will increase to Rs1,791 crore.

As on December 31, 2013, Warburg Pincus held a controlling 71.99 per cent equity stake in Capital First and will maintain the holding after the preferential allotment.