Former Deutsche Bank Asia CEO Gunit Chadha to head Everstone’s NBFC

MUMBAI: Former Deutsche Bank Asia head Gunit Chadha is set to invest up to Rs 120 crore to pick up a minority stake in IndoStar Capital Finance, a finance company floated by private equity firm Everstone Capital, and take charge as its chairman.

Chadha, who till July was chief executive of Deutsche Bank's Asia Pacific operations, and IndoStar management will sign a formal agreement “anytime soon”, two people directly aware of the negotiations told ET.

“It's almost finalised. Some minor paperwork needs to be completed and we will formally announce the same within a few weeks,” one of them said.

Chadha will steer the private lender towards retail segment from its already established corporate focus.

Spokespersons of Everstone Capital and IndoStar declined comment when contacted. Phone calls and text messages to Chadha did not generate any response as of press time Wednesday.

Cofounded by former Goldman Sachs bankers Samir Sain and Atul Kapur in 2006, Everstone Capital is now the largest India-focused private equity investment firm.

While Everstone owns half of IndoStar, other shareholders in the five-year-old NBFC include Goldman Sachs, Ashmore Group and Baer Capital Partners.

One of the persons mentioned above said Goldman Sachs may exit the venture after selling its stake to Chadha, but that could not be independently verified.

IndoStar chief executive Vimal Bhandari will continue to be the managing director nd CEO, sources said.

Started in 2011 with an initial capital of Rs 1,000 crore, IndoStar is predominantly a corporate lender. The company also extends credit facilities to small and medium enterprises. The company has loan book of close to Rs 5,000 crore, two third of which constitutes of corporate loans.

For the financial year ended March 2016, it posted revenues of Rs 355 crore, up 31% year on year, while profit after tax grew 38% at Rs 192 crore. Its loan book registered a growth of 24% at Rs 4,265 crore compared to the same period a year ago.

Chadha, was at Deutsche Bank for 13 years and was heading its India operations before moving to Singapore to take charge of the larger APAC region. He joined the German Bank in 2003 from IDBI, where he was the chief executive officer. In 2012 he became the co-chief executive of Asia Pacific region and in 2015, was appointed as CEO of the region, spearheading the bank’s business in nearly 17 regions. Chadha was responsible for setting up investment banking, retail banking and institutional broking business in India for Deutsche Bank.

With his entry into IndoStar, Chadha will be joining the league of high profile global bankewho are backing Indian NBFCs or starting out on their own in the private financial services space at a time when global banks are rethinking their India strategy.

Vikram Pandit, former CEO of the world's biggest bank Citi, teamed up with ace rainmaker Nimesh Kampani of JM Financial in 2013 after reaching the summit of success in Wall Street. Earlier this year, Jaspal Bindra, former executive director and head of Asian operations at Standard Chartered Bank, picked up a significant minority stake in Centrum Group and joined the company as executive chairman.

Former Deutsche Bank co-CEO Anshu Jain and ex-Deutsche Bank executive Bhupinder Singh have started a technology-driven NBFC, InCred, focusing on education loans, mortgages and SME lending.

According to analysts, Indian NBFCs have maintained healthy loan book growth by virtue of their niche and focused clientele. They are expected to continue the current growth momentum, especially firms focused on consumer finance and SME. “NBFCs have largely had a much better run in terms of asset growth despite a slowing economy,” Sharekhan said in a note earlier this month.