TVS Venu Group may be looking to acquire a 9.99% stake in Bengaluru-based Jana Small Finance Bank with an infusion of Rs 450-500 crore. Jana SFB said that its board will on Monday consider fund-raising options, including the issuance of equity shares, convertible bonds, warrants, debentures and other securities through routes such as a qualified institutional placement, preferential allotment, rights issue or further public offer.
The proposed 9.9% stake is in line with RBI norms which cap shareholding by non-financial corporate entities in banks at 10%.
The deal is likely to be executed through Srinivasan’s newly created entity, TVS Venu Management and Consultancy Services Private Limited. The company, formed in January this year, acquired Prudential Financial Inc’s Indian asset management company, PGIM India Asset Management. If the deal goes through, it would also mark the first time a corporate entity housed within a conglomerate takes a significant shareholding in a bank.
Sources indicated that Srinivasan may invest about Rs 500 crore in Jana SFB, and the deal is expected to be announced next Monday when the bank’s board approves the fund raise. Structured as a preferential issue, the fund raise may bolster Jana SFB’s capital adequacy by at least 2.5 percentage points, taking its overall capital adequacy ratio to around 22 percent.
