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Here are a few private equity backed IPOs hitting the capital market. The latest is by Motilal Oswal Financial Services (MOFSL), an institutional and retail broking firm, backed by private equity funds New Vernon Private Equity and Bessemer Venture Partners. Motilal Oswal has priced its IPO at a price band between Rs 725 and Rs 825. It intends to sell 2.98 million equity shares of Rs 5 each through a 100 per cent book building process. The Mumbai-based company will raise about Rs 216 crore at lower price band and Rs 245 crore at the higher band. The issue will constitute 10.5 per cent of the post-issue paid-up equity capital of the company.

How much money will the private equity funds make on the basis of the IPO price? New Vernon and Bessemer had picked up 9.47 per cent stake in the company last year for Rs 518.9 a share. The PE funds are in the money at an appreciation of 40-50 per cent already in MOFSL.

MOFSL is the holding company of four businesses - Motilal Oswal Securities Ltd (broking business), Motilal Oswal Commodities Brokers, Motilal Oswal Investment Advisors (investment banking business) and Motilal Oswal Venture Capital Advisors (venture capital advisory). Citigroup Global Markets India is the book running lead manager and Intime Spectrum Registry is the registrar to the issue.

Comment: This issue is likely to do well since there is an appetite for financial services stocks. The stock isn't cheap, though.

Another PE-backed IPO is that of Coimbatore-based textile company KPR Mills. The company is backed by Blue River Capital, Brandot International, Argonaut Private Equity (who together invested Rs 105 crore in December 2006), and Peterson Partners, who invested $3 million in February 2007.

The issue, which closed on August 7, was priced within a band of Rs 225-265, about 12-14 times its 2006-07 per-share earnings. On an expanded equity base, the multiple stood at 15-17 times. The issue constituted 15.69 per cent of the fully diluted post issue paid-up capital of the company. At the lower band, the company would raise Rs 133 crore and at the higher band Rs 156.6 crore. Kotak Mahindra Capital Company Ltd. and and ICICI Securities were managers for the issue.

Comment: The issue got just about subscribed 1.19 times. The retail portion was undersubscribed at 0.6 times. Some HNIs and institutions saved the issue, which has been priced at lower end of the price band - Rs 225 a share.

UTI Ventures and Argonaut Private Equity-backed Zylog Systems had a great close of its IPO recently. The Rs 126 crore IPO was oversubscribed 76.4 times last month. The issue, which was priced in the band of Rs 330-350, received 275.45 million bids compared to the issue size of 3.60 million shares. Zylog is a Chennai-based company in areas like web application, mobile computing, and enterprise infrastructure management. UTI Venture and Argonaut had invested $10 million the company in March 2007.

Comment: Zylog is expected to have a good opening (rumoured to be 40 per cent) when it lists in the next few days.