Private equity firm Actis and UK-based development finance institution CDC Group have exited their nine-year old investment in commercial vehicle maker SML Isuzu Ltd. The two investors sold their combined 12.33 per cent stake for Rs 73.15 crore ($14 million) in SML Isuzu, which was earlier known as Swaraj Mazda Ltd.
Shares of SML Isuzu closed flat at Rs 410 after moving up to Rs 415.05 during intra-day trade on the BSE on Thursday. The company is currently valued at Rs 594.5 crore.
Actis Agribusiness Ltd and CDC Financial Services (Mauritius) Ltd sold their stakes at Rs 410 per share. The shares were picked up Reliance Life Insurance Company, Axis Mutual Fund and Antique Stock Broking.
The exit for Actis follows SML Izusu’s Japanese investor Sumitomo Corporation selling 11 per cent stake to Isuzu Motors for an estimated Rs 60 crore last week. Izusu, whose stake in the venture now stands at 15 per cent, is expected to bring in proprietary technology and newer models to venture.
SML Isuzu was established as a joint venture involving Sumitomo, Punjab Tractors Ltd and Mazda Motors Ltd in 1985. Punjab Tractors was taken over by CDC (from which Actis was spun out) and was sold to Mahindra & Mahindra in 2007.
M&M sold its 14 per cent stake in SML Isuzu to Sumitomo for Rs 40 crore in January 2009, raising the
promoters holding to 53.52 per cent.
For the first nine months of FY12, SML Isuzu reported an 18 per cent increase in total income to Rs 735.2 crore with net profit moving up 40 per cent to Rs 33.6 crore as compared to the same period last year.
The latest transaction marks a portfolio exit for Actis after more than a year where it had sold its stake in Paras Pharmaceuticals to global consumer goods major Reckitt Benckiser Group plc. Reckitt had acquired private equity controlled Paras Pharmaceuticals for Rs 3,260 crore or $726 million. Private equity major Actis exited the Ahmedabad-based firm along with Sequoia Capital India and the promoter group, in one of the largest M&A exits for a private equity controlled firm in India.