ChrysCapital, CX Partners to buy 6.8% in KPIT Cummins for $30M
Private equity major ChrysCapital is doubling down on its investment in information technology firm KPIT Cummins Infosystems Ltd.
ChrysCapital, along with CX Partners, is investing Rs 162 crore ($30 million) in Pune-based firm through a preferential allotment.
ChrysCapital, which already holds 9.52 per cent stake in KPIT, will see its shareholding go up to nearly 13.6 per cent with this investment. The firm had acquired 8.9 per cent stake in KPIT Cummins in January 2011 for Rs 112.5 crore and later bought some additional shares from the market.
ChrysCapital seems to be leading the current round by infusing Rs 97.2 crore, taking its total investment in KPIT to over Rs 210 crore. CX Partners, started by former Citi Venture Capital International (CVCI) India head Ajay Relan, will take 2.7 per cent stake in KPIT for Rs 64.8 crore.
The shares of the firm are being subscribed at Rs 125 a unit, which is over 72 per cent premium to ChrysCapital’s subscription price of Rs 72.5 last year (after taking into account the bonus of 1:1 earlier this year).
The KPIT scrip shot up 4.74 per cent to hit a high Rs 128 in early trade and was at Rs 124.45, up 1.84 per cent on the BSE at 10:52 am on Wednesday.
KPIT reported FY12 revenues at Rs 1,500 crore, a Y-o-Y increase of 46.6 per cent with profit after tax (PAT) up 54 per cent to Rs 145.4 crore, compared to previous fiscal. For Q2 FY13, KPIT reported 74.5 per cent increase in revenues to Rs 567 crore and 11.5 per cent increase in PAT to Rs 41 crore on Y-o-Y basis.
Pune-based KPIT, a product engineering and IT consulting firm focused on industries like manufacturing and automobile, had early investors like Rakesh Jhunjhunwala, IFC and Lehman Brothers.
KPIT Cummins started as a financial auditing firm, decades before moving into the field of software. In 2002, it had acquired the IT arm of the diversified machinery maker Cummins Inc., which held 10.63 per cent stake in the firm as of September 2012. Last week, it sold around 2.9 per cent stake for Rs 65 crore on the exchanges.
Since 2002, KPIT Cummins did eight other acquisitions, with the latest coming last year when it picked up 50 per cent stake for Rs 103 crore in business technology service provider Systime, to expand its Oracle-based consulting and services business. It also picked up a minority stake in Sankalp Semiconductor Pvt Ltd earlier this year.
“KPIT’s management has maintained its FY2013 USD revenue growth of a whopping 32-35 per cent YoY ($408-418 million), which is the strongest among its peers, even on the back of a strong 40 per cent YoY revenue growth recorded in FY2012, because of the company’s strengthening deal pipeline as well as incremental revenues from Systime. This guidance includes $45 million of inorganic revenue in FY2013 from Systime. On the PAT front also, the company has maintained its guidance of 19-24 per cent YoY growth to Rs 173-180 crore,” said a report from Angel Broking on the firm.
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ChrysCapital Investment Advisors India Pvt. Ltd. (formerly known as Chrysalis Capital) is a private equity firm with $2.5 billion assets under management. It provides early stage, expansion, growth and buyout capital to listed and unlisted companies operating in India. The firm seeks to invest in consumer goods and business service, infrastructure, manufacturing, healthcare, pharmaceuticals and financial sectors. It typically invests between $30 million and $300 million in the companies with revenues ranging from $50 million to $1 billion. The company was founded in 1999 and is based in Port Louis, Mauritius with additional offices in Mumbai and New Delhi.
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KPIT Technologies Ltd. (formerly KPIT Cummins Infosystems Ltd.) is engaged in providing information technology innovative products and solutions for manufacturing, automotive and transportation, energy and utilities sectors. Its services include development, maintenance and support of software applications and risk management. The firm also offers supply chain management solutions, development of personal computer based tools, embedded software and networking solutions for automotive companies, chip designing for semiconductor companies. The company was founded in 1990 and is based in Pune, Maharashtra.
CX Capital Management Ltd. is a private equity firm with $500 million assets under management. It provides growth capital to companies operating in India. The firm also makes distressed, turnaround, and mezzanine investments. The firm seeks to invest in power, electronics, hotels, telecommunications, consumer products and services, information technology and financial services. The company was founded in 2009 and is based in New Delhi, India.
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