The market is abuzz with talk that private equity fund Sequoia Capital has turned active in the counter of nonbanking finance company Manappuram General Finance, with triggers being attractive valuation and high growth potential of the gold loan sector.
The fund is learnt to have bought shares worth Rs 50 crore in the past one week, thereby re-entring the company after exiting its previous investments last year. Sequoia Capital India Growth Investments had invested $14 million to acquire a 14% stake in Manappuram.
Out of this, 11.5% was bought at Rs 145 in 2007 and the remaining 2.5% was bought at Rs 165 in 2008. The fund exited the company at Rs 740 per share in April 2010. Shares of Manappuram General Finance ended 0.3% higher at Rs 57.3 against a 0.8% fall in the Sensex on Thursday.
The stock is currently quoting ex-bonus after the company offered bonus in the ratio of one for every one share held by the shareholders.
Source: Economic Times