For Aion Cap, the last exit is coming up

Aion Capital, a fund of US-based private equity (PE) firm Apollo Global Management, has started the process of exiting non-bank lender Clix Capital Services, two people aware of the matter said. Aion Capital was wound down in 2020, and Clix is one of the last investments in its portfolio.

Aion Capital is interviewing investment banks to arrange the transaction, one of the people cited above said. “It is likely to be sold to either a PE fund or an NBFC (non-banking financial company),” the person added.

The current net worth of Clix is around 2,000 crore, a second person said.

Aion Capital, an erstwhile joint venture (JV) between Apollo Global Management and ICICI Venture, shut operations after the JV closed in 2020. Since then, Apollo has managed the assets of Aion.

Apollo Global Management did not respond to a request for comment. Pramod Bhasin, a shareholder and chairperson of Clix Capital, declined to comment.

Even as it prepares to appoint investment banks to sell Clix, Apollo is likely to put in an additional 200 crore into the company to push for further growth, one of the people cited above said. Aion had previously infused capital of around $40 million in 2019.

On 9 February, Clix’s board had approved a rights issue of up to 250 crore, according to a regulatory filing.

Aion Capital acquired Mumbai-headquartered Clix Capital and its subsidiary Clix Housing Finance in 2016 through a joint venture with Bhasin, a former head of Genpact, and former GE India head Anil Chawla, for approximately 2,250 crore (then $327 million). Aion owns 85% of Clix.

A Care Ratings report in January said it had upgraded Clix’s rating from ‘stable’ to ‘positive’ on expectations that growth and profitability will continue.

“The revision in outlook takes comfort from the support received from its promoter Apollo Global Management, which is expected to infuse incremental capital into the company in the current fiscal year (FY24),” the report dated 8 January said.

Clix Capital and its subsidiary Clix Housing are also in the process of being merged, according to the Care report. In November 2022, the board of Clix Housing Finance approved a merger with Clix Capital, according to a regulatory filing.

Aion had last entered into discussions with Suryoday Micro Finance to merge with Clix Capital Services in December 2019, but the talks did not progress further, Business Standard had reported at the time.

Clix Capital Services had assets under management of 5,214 crore as of September 2023, up from 4,484 crore in March 2023. The firm’s gross non-performing assets shrank from 4.99% in March 2022 to 2.48% in March 2023, and fell further to 2.3% in September 2023, the Care report said.

The report also pegged Clix’s profits at 28.3 crore for FY23, up from a loss of 98.5 crore in FY22. Clix Capital reported total operating revenues of 732.8 crore in FY23, up from 685.9 crore in FY22.

Like other NBFCs, Clix also saw a fall in revenues due to covid, which rebounded in FY23, Care reported.

Aion’s other deals included the turnaround of Monet Ispat & Energy. Aion and JSW Steel together put in a bid for Monet Ispat. This was one of the first bids to be approved under IBC.

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