Axis Bank is said to weigh majority stake sale of $1 bn shadow bank unit, ET BFSI
Axis Bank Ltd. is contemplating choices for Axis Finance Ltd., together with the attainable sale of a majority stake within the shadow-bank unit, in line with folks aware of the event.
The private sector lender is working with an adviser on a strategic overview for Axis Finance, the folks mentioned, asking to not be recognized discussing non-public info. The financial institution might search a valuation of $900 million to $1 billion in a possible transaction, the folks mentioned.
Deliberations are ongoing and Axis Financial institution may determine to not proceed with a sale, the folks mentioned.
A consultant for Axis Financial institution didn’t reply to a request in search of remark.
Shadow banks sometimes goal clients who’ve restricted or no entry to conventional banking providers due to their low earnings or lack of credit score historical past. The lenders put greater rates of interest on loans, which might make them extra weak to defaults and a stress level for the broader monetary system.
Fairness infusions from Axis Financial institution have supported Axis Finance’s development, Fitch’s India Rankings & Analysis mentioned in a report in January, noting the latest was 3 billion rupees in fiscal 12 months 2024. Axis Financial institution additionally gives 20.5 billion rupees in backup funding traces and operational oversight, India Rankings mentioned.
Axis Finance is an entirely owned subsidiary of Axis Financial institution, offering providers reminiscent of company and collateral loans and actual property financing, its web site exhibits.
