New Delhi, July 9 -- Mid-market private equity firm Amicus Capital-started a decade ago by former True North partner Sunil Vasudevan, who was later joined by former Carlyle managing director Mahesh Parasuraman-has hit the sell button on a company it backed from its maiden fund with barely anything to show its Limited Partners (LPs).
The PE firm, which initially had a leaning towards financial services from its first fund, has sold the bulk of its remaining 2.85% stake in Capital Small Finance Bank. It harvested Rs 25 crore via a secondary market transaction on Tuesday. Its remaining stake is worth around Rs 16 crore.
This comes two-and-a-half years after Amicus trimmed its stake as part of the company's initial public offering (IPO). It encashed Rs 7 crore at the time, albeit with respectable annualised returns.
Amicus had invested Rs 42.5 crore in the lender via two tranches between June and November 2019. It had co-invested with Oman India Joint Investment Fund (OIJIF) and a large Mumbai-based family office.
Amicus has generated an annualised return of 4% on the realised portion in rupee terms, as per VCCircle estimates. This is way below the 20% benchmark returns.
Capital Small Finance Bank's share price sank after listing in February 2024 and never managed to reach the level at which it went public. The company is currently valued a third less than at the price at which it floated its IPO.
Amicus's partial exit comes soon after OIJIF also pruned its stake. Last month, OIJIF, a private equity firm set up by the sovereign wealth fund Oman Investment Authority (OIA) and the State Bank of India (SBI), sold part of its stake in the small finance bank with lukewarm returns. It divested a 3% stake in Capital Small Finance Bank for about Rs 36.8 crore ($3.8 million) via open market transactions. OIJIF had garnered Rs 39.16 crore via the lender's IPO.
OIJIF had invested Rs 84.34 crore in the lender in November 2019 and picked up a stake of less than 10%. While the partial exit in the IPO generated an internal rate of return (IRR) of about 15.6%, its stake sale last month was barely above water. Overall, the PE firm has harvested about Rs 76 crore from Capital SFB so far. This takes its overall realised IRR to nearly 6%, the estimates show.
OIJIF and Amicus had previously planned to monetise their bet in the bank in 2021 but had put it on the backburner only to revive it two years later. The investors, however, slashed the offer-for-sale size when the IPO eventually happened in early 2024.
Ambuja Cements co-founder Narotam Sekhsaria's family office is another existing investor sitting with negligible returns on its investment in the bank.
Capital Small Finance Bank commenced operations as India's first small finance bank in 2016. It has seen valuation multiple compression since it listed while its business remains concentrated in its legacy market of Punjab.
Its profit metrics have been modest due to the lower yields from the fully secured nature of the loan book. It churned out a net profit of Rs 141 crore for the year ended March 31, 2026, compared with Rs 93.5 crore in FY23, the immediate year before it went public.
Published by HT Digital Content Services with permission from VC Circle.