VCCircle

AMIF, an Och Ziff advised fund, is selling around 6.8 million shares to the promoters.

AMIF, an arm of Och Ziff , is selling around 6.8 million shares (out of over 17 million or 24% stake that it owns in Nitesh Estates) to the promoters. This is as per an agreement that entitles the promoters to a call option to buy back a certain number of shares assuring 15% return per annum to the Och Ziff advised fund.

This deal is likely within the next two months and comes as the Bangalore-based realty firm Nitesh Estates is looking to raise Rs 450 crore through a public float (in addition to a greenshoe option to raise a further Rs 45 crore).

In the meantime, the company is also looking at a pre IPO deal to sell around 2.4% of post issue capital that could raise up to Rs 30 crore. This would translate into an indicative issue price of around Rs 115 which would mean the company is going to dilute as much 36% stake through issue of around 39 million fresh shares.

AMIF had invested Rs 36.5 crore a little less than three years ago and has an average cost of acquisition of Rs 21.4/share. Although it would be selling more than a third of the total shares to the promoters at a price of Rs 32.64/share, it would be sitting on capital appreciation of over 5x on its remaining investment, as per VCCircle estimates. In total at the issue price AMIF would have encashed Rs 22.5 crore with the remaining stake valued at Rs 117.5 crore or 4x returns on its three-year-old investment.

The promoters’ holding post IPO will be around 65%. The company at the issue price of Rs 115 will be valued at Rs 1,242 crore ($267 million). For the year ended March’09, the company had total income of Rs 87.8 crore with net profit of Rs 2.5 crore. Nitesh also has investments from Citi Property and HDFC AMC for specific projects and SPVs of the company.

Correction: Earlier, we had erroneously mentioned AMIF as ADCB Macquarie Infrastructure Fund. The error is regretted.