Capital First
Capital First was in limelight yesterday, hitting a new high. The company, an NBFC, which lends mostly to the SME sector and offers loans for gold, durables and two-wheelers, was up after the company announced that it has called an EGM on 28th March, for shareholders approval for issue and allotment of equity shares on preferential basis. The company plans to raise around Rs.179 crore from an affiliate of US-based private equity firm Warburg Pincus and HDFC Standard Life Insurance Company. Capital First will allot 83.6 lakh shares to Warburg Pincus affiliate Cloverdell Investment for Rs 129 crore and 32.5 lakh shares to HDFC Standard Life for Rs.50 crore. The preferential issue will increase Warburg Pincus' holding in the company to 72% while HDFC Life will get 4% stake. In June 2012, Warburg had acquired the Future Group's 42.73% holding in Capital First.
The company had ended 9MFY14 on a good note, with income rising 29% (YoY) at Rs.780 crore but net profit, which came in at Rs.23 crore, was down YoY by 58% but this was mainly on account of the net profit in FY13 going up on account of the exceptional income of Rs.22 crore. Starting 13th Nov’13, the company discontinued its broking and wealth management business and this gave a consolidated loss of Rs.5 crore for 9M ended 31st Dec’13. But thanks to discontinuation of this business, employee expenses were lower.