Apollo-Backed Fund Said to Vie With Fairfax for India Bank Stake

  • Recent stake purchase valued bank at about $200 million
  • Everstone wants to merge IndoStar Capital with Catholic Syrian

Aion Capital Partners, a private equity firm backed by Apollo Global Management LLC, is among suitors that have expressed interest in buying a stake in India’s Catholic Syrian Bank Ltd., people familiar with the matter said.

Everstone Capital has also approached Catholic Syrian’s board about a possible deal, according to the people, who asked not to be identified because the information is private. The investment firm would seek to merge its own finance company, IndoStar Capital Finance Ltd., with the Indian lender, the people said.

The suitors could present competition for Fairfax Financial Holdings Ltd., which already won central bank approval last year for a potential deal. Led by value investor Prem Watsa, Fairfax will enter detailed price negotiations with Catholic Syrian as soon as this week about buying a 51 percent stake, the people said. 

Ahead of talks there is a significant gap between the valuations the parties have assigned to Catholic Syrian, a lender headquartered in Thrissur in south India’s Kerala state with more than 430 branches, according to the people. The bank will start discussions based on an external valuation report estimating it’s worth about 165 rupees to 200 rupees per share, plus a premium of at least 15 percent, one of the people said. 

An investor recently bought about a 4 percent stake in Catholic Syrian at around 160 rupees per share, a premium to the lender’s book value of about 123 rupees per share, the people said. That purchase valued the bank at about 12.96 billion rupees ($200 million), data compiled by Bloomberg show.

Any deal could mark the first time a financial investor takes control of an Indian lender. Catholic Syrian had 162.2 billion rupees of assets at the end of March, according to its financial results. The lender’s network includes 240 automated teller machines in India, its website shows. Representatives for Aion, Catholic Syrian, Everstone and Fairfax declined to comment.

Aion and Everstone haven’t started formal negotiations with Catholic Syrian, and any bidders would need to get central bank approval for a deal, according to the people. Catholic Syrian may seriously engage with them if it can’t reach an agreement with Fairfax, the people said.

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE