Strategic Share Divestiture by Warburg Pincus in Home First Finance

Strategic Share Divestiture by Warburg Pincus in Home First Finance

VoM News Desk | November 23, 2023 | 10:48 PM IST | Breaking News | Follow on Google News

Strategic Share Divestiture by Warburg Pincus in Home First Finance

Strategic Share Divestiture by Warburg Pincus in Home First Finance

In a notable development in the finance sector, global private equity firm Warburg Pincus, along with two promoter group entities, has executed a significant divestment of shares in Home First Finance. The sale, conducted via the open market on Thursday, saw shares worth ₹750 crore being offloaded. This transaction represents the second such move within a span of six months, highlighting a strategic shift in their investment in the company.

Breakdown of the Share Sale

The divestiture involved Warburg Pincus selling 28,83,819 shares through its subsidiary Orange Clove Investments BV, which constituted a 3.3% stake in Home First Finance, amounting to approximately ₹251 crore. Additionally, Aether Mauritius, a key player in the promoter group, disposed of 23,07,229 shares (a 2.6% stake) for about ₹201 crore. True North Fund V LLP, another promoter entity, divested 34,60,699 shares, translating into a 3.9% stake, for around ₹301 crore.

Market Impact and Share Price Dynamics

This collective offloading of shares was conducted at an average rate of ₹870.4 per share. This rate was approximately 5% lower than the stock’s previous closing price, leading to a 4% decrease in the stock value on the National Stock Exchange, where it closed at ₹877.20. Previously in May, a combined sale of ₹330 crore in shares was made by these entities, affecting the stock’s performance.

New Investments and Company’s Performance

Simultaneously, Smallcap World Fund Inc, a California-based venture capital firm, secured a 2.7% ownership in Home First Finance, purchasing 2,395,000 shares for an estimated ₹208 crore. Furthermore, Fidelity Investments acquired 476,331 shares at ₹870 per share, totaling ₹41.4 crore. Despite these significant ownership changes, Home First Finance continues to excel in the non-banking financial company (NBFC) sector, having delivered nearly 20% in returns in 2023.

VoM News Desk

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