ChrysCapital Investment Advisors has bought a 12% stake for Rs.100 crore in Pratibha Industries Ltd, a Mumbai-listed infrastructure firm that lays water pipelines, builds roads and develops real estate.
“We don’t comment on the specific strategy behind the investment, but all I can say is that we are quite positive on the company and hence recommended this deal to our investors,” said co-founder and senior managing director Ashish Dhawan of ChrysCapital, an Indian private equity (PE) fund which manages $2 billion (around Rs.9,000 crore).
The fund invested in Pratibha through Van Dyck, a subsidiary of ChrysCapital V Llc, which values the 28-year-old firm at Rs.833 crore. ChrysCapital invested Rs.50 crore in an issue to qualified institutional investors, Rs.35 crore to buy preferential shares and Rs.15 crore in compulsorily convertible participatory preferential shares.
“The funds are raised primarily to meet long-term working capital requirement and repay some short-term debt,” Pratibha Industries’ chief financial officer T.R. Radhakrishnan said. The company has raised a total of Rs.150 crore through a QIP (qualified institutional placement) and from a PE fund.
ChrysCapital, known for investing in public companies, has this year returned $400 million to investors from its $1.15-billion Fund V by exiting from various firms. It invested $13 million in Gammon India Ltd in August this year.
Pratibha has an order book of Rs.3,700 crore with 40 ongoing projects across the country. “We recently worked with the Navi Mumbai Municipal Corporation in putting up 43km of water pipeline in the area and are working with them on two-three more projects,” Radhakrishnan said.
Companies such as Pratibha are bound to attract PE attention as “there is a clear line of sight in terms of growth”, according to Muneesh Chawla, managing director of Blue River Capital India Advisory Services Pvt. Ltd, a Mumbai-based PE firm.
On Friday, Pratibha Industries’ shares dropped 10.35% to close at Rs.64.50 a share on the Bombay Stock Exchange, while the exchange’s benchmark Sensex index lost 0.94% to end at 19,136.61 points.
Infrastructure companies have recently attracted large investments from PE funds.
Kohlberg Kravis Roberts and Co. invested $49 million in Avantha Power and Infrastructure Ltd, Ascent Capital Advisors India Pvt. Ltd invested $43 million in IVRCL Assets and Holdings Ltd and Norwest Venture Partners and Xander Advisors India invested $86 million in Sadbhav Infrastructure Project Ltd.
Source: Livemint