IndoStar Capital Finance, a Mumbai-based non-banking finance company registered with the Reserve Bank of India as a systemically important non-deposit taking company, announced that it has raised Rs 1,225 crore equity capital from Brookfield, according to an ET report.
The investment by Brookfield in the retail-focussed NBFC is a combination of primary investment in equity shares and compulsorily convertible preference shares (CCPS).
With this investment, Brookfield will become a co-promoter with 24.6 per cent stake, along with IndoStar Capital Mauritius having 45.2 per cent holding at present.
“This investment is a strong endorsement of IndoStar’s business model, management capability and quality of its franchise. This investment not only provides equity funding but also access to new debt financing via Brookfield’s relationships with financial institutions,” Indostar’s executive vice-chairman and CEO, R Sridhar, said in a release.
Brookfield will also invest Rs 225 crore through secondary purchase of shares from IndoStar Capital Mauritius.
Post this infusion, IndoStar’s capital adequacy ratio has improved to almost 40 per cent compared with 27 per cent before this equity infusion, the release said.
IndoStar Capital Finance Limited is primarily engaged in providing structured term financing solutions to corporates and loans to small and medium enterprise borrowers in India. It provides vehicle finance for purchase of used or new commercial vehicles, passenger vehicles and two-wheelers. The company also offers housing finance products through its wholly-owned subsidiary IndoStar Home Finance Private Limited.
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