Oman India Joint Investment Fund picks additional 5.3% stake in NCDEX for $8M
Oman India Joint Investment Fund (OIJIF), a private equity fund sponsored by Oman’s sovereign wealth fund State General Reserve Fund and India’s largest lender State Bank of India, has picked up another 5.3 per cent stake in India’s largest agri-commodity derivatives exchange National Commodity & Derivatives Exchange Ltd (NCDEX) from Jaypee Capital Services Ltd for Rs 49.56 crore ($7.87 million).
The deal was closed late last month and came as a second leg of a transaction where previously OIJIF teamed up with other investors to buy a stake in NCDEX.
In November, IDFC Alternatives, an alternative investment arm of infrastructure financier IDFC, picked up around 5 per cent for Rs 45.6 crore in the Mumbai-based bourse while OIJIF bought 4.7 per cent for around Rs 42.8 crore. Build India Capital Advisors LLP, headed by Old Lane India CEO Hari Iyer, had also picked up another 5 per cent stake in NCDEX raising its holding 6.1 per cent for an estimated Rs 45.6 crore.
These deals valued NCDEX at Rs 912 crore, a premium to Rs 735 crore in 2010 when Shree Renuka Sugars picked up stake in the bourse from rating agency Crisil. But it was still half of over Rs 1,800 crore valuation that Atlanta-based Intercontinental Exchange (ICE) paid for 8 per cent stake in 2007.
The latest deal by OIJIF is at a marginal premium valuing NCDEX at Rs 935 crore.
OIJIF now holds 10 per cent, the same as National Stock Exchange if India Ltd. Other large shareholders include LIC and NABARD who own 11 per cent each and Shree Renuka Sugars, which is the largest shareholder in the exchange with 12.5 per cent stake.
Post this deal, Jaypee Capital holds 2.38 per cent stake in NCDEX. Previously it was the single largest shareholder with over 22 per cent holding. NCDEX had issued shares to Jaypee Capital under a discounted preferential allotment to become an anchor investor and increase volume on the exchange. The shares to Jaypee Capital were reportedly issued at Rs 59 per unit. This means it has made a little over 3x in this second tranche of stake sale to OIJIF.
ELP Practice group advised Oman India in relation to their second tranche.
NCDEX reported a 9 per cent increase in total income to Rs 151 crore with profit after tax up 24 per cent to Rs 43.9 crore in FY13 compared with the previous fiscal.
It enjoys 70 per cent market share in agri-commodity derivatives and has more than 700 accredited warehouses across India with capacity to handle more than 2.6 million tonnes.
OIJIF’s other investments include ING Vysya Bank, defence electronics maker Indus Teqsite, industrial explosives maker Solar Industries India and Beaver Engineering & Holdings, which is the holdings company of HBL Power Systems.
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Oman India Joint Investment Fund - Management Company Pvt. Ltd. is a private equity firm with $100 million under management. It provides project capital and private equity capital to companies operating in India and Oman. The firm seeks to invest in oil and fertilizers, education, healthcare, pharmaceutical, retail, chemicals, hospitality, real estate, information technology, tourism, and infrastructure sector. It typically invests between $10 million and $15 million in its portfolio companies. The company was incorporated in 2010 and is based in Mumbai, Maharashtra.
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JayPee Capital Services Ltd. is a securities broking firm. It offers securities broking, currency broking, depositary custodial services, financial advisory services, wealth management services and mutual fund distribution to individuals, corporations and institutional investors in Indian and Internationally. It offers broking services for equities, commodities, currencies, mutual funds, initial public offerings and derivatives. The company was founded in 1995 and is based in Mumbai, Maharashtra.