JM Financial will nominate Mr. Pandit as non-executive chairman of the NBFC
JM Financial on Thursday said that former Chief Executive Officer, Citigroup Inc. Vikram Pandit, along with his business partner Hari Aiyar will make a strategic investment in JM Financial with potential additional investments in its non-banking finance company (NBFC), proposed bank and a joint distressed asset fund. The board of JM Financial on Thursday approved “strategic investment of 3 per cent equity stake by Mr. Vikram Pandit and Mr. Hari Aiyar in JM Financial Limited through the issue of warrants,” JM Financial said in a release.
It has also decided to expand the lending and financing businesses of JM Financial by issuance of $100 million of capital to Global Funds raised and managed by a firm led by Mr. Pandit. JM Financial will nominate Mr. Pandit as the non-executive chairman of the NBFC.
It would also form a distressed asset fund to be set up jointly by JM Financial and Mr. Pandit’s firm with an initial target capitalisation of $100 million. JM Financial said that it would apply for a banking licence and nominate Mr. Pandit as the non-executive chairman of the proposed bank. “Mr. Pandit and Mr. Aiyar will have the right to purchase shares up to the amount prescribed by the RBI in this entity,” it added. Both were the founding members of Old Lane, LP, which was later acquired by Citigroup Inc. “Given the opportunity, JM Financial can provide the banking and financial services that the country needs,” said Mr. Pandit.
The JM Financial Group Chairman Nimesh Kampani said that “We share similar values and are confident that the proposed association will create strong domestic financial services businesses.”
JM Financial will issue over 1.16 crore warrants worth about Rs.22.6 crore to Mr. Pandit, the company said in a statement.