July 2012
« Jun   Aug »

Contact us

Carlyle buys 10% stake in Infotech

Private equity giant Carlyle Group has acquired about 10% stake in Infotech Enterprises in a booster deal for India’s mid-tier IT services story.

Carlyle picked up shares through stock exchange transactions on Wednesday, joining another private equity investor General Atlantic Partners, which holds 12.39% stake in Infotech Enterprises. The two investors together control a stake almost equal to 22.82% promoter holding, setting stage for an interesting private equity play in the technology services company with $330 million revenue.

Carlyle’s entry comes at a time of waning global investor interest in the Indian IT services sector — the smaller companies in particular. Analysts and some investors have trained guns on Indian IT services giants like Infosys after they failed to meet street expectations in recent quarters. Infosys will announce first quarter numbers on Thursday.
“It’s an interesting deal. Carlyle shows there’s still appetite for mid-sized IT services companies,” said a senior investment banker tracking the IT industry.

Carlyle mopped up more than 1.1 crore shares (or 9.96% stake) at Rs 190 per share from a clutch of smaller investors, including Kotak India Focus Fund. Carrier International Mauritius is another foreign investor with 13.72% shares in the company.

Carlyle was keen on acquiring the stake as it felt there was more room for the company’s growth and had even approached the promoters to buy part stake in the past. But with the promoters refusing to dilute the stake, they had finally resorted to a secondary market operation to invest in the company.

Infotech Enterprises chairman and managing director BVR Mohan Reddy refused to comment on the deal saying the company was in the silent period as it was gearing up to announce its first quarter results next week. “I can’t comment at this point of time. It is a secondary market transaction that has happened; that’s all I know,” said Reddy.
Source: Times of India

Comments are closed.