Aditya Birla Private Equity Fund and Mauritius-based $115-million mezzanine fund, BanyanTree Growth Capital LLC, are co-investing Rs 62.5 crore and Rs 1.36 crore respectively in GEI Industrial Systems Ltd, a manufacturer of air-cooled heat exchangers and condensers.
The investment through a mix of compulsory convertible preference shares and equity convertible warrants will give Aditya Birla PE up to 12.7% stake post conversion (within 18 months), as per VCCircle estimates. BanyanTree Growth Capital that already owns 8.72% will see a marginal dip in its holding percentage to 7.6% after factoring in expansion in equity due to fresh issue to the promoters who are also subscribing to warrants convertible into equity.
GEI Industrial, that had revenues of around Rs 250 crore last fiscal, is a Bhopal-based firm specialising in heat transfer technology that primarily focuses on oil, gas, power and compressors businesses.
Aditya Birla Capital is investing by picking up 2.5 million 5% compulsorily convertible preference shares of Rs 250 each. These will be convertible into one equity share each in 18 months. The deal represents a 40% premium to GEI’s Thursday closing price of Rs 178.65 per share. The share price of GEI closed at Rs 198.95 today, up by more than 11%.
Banyan Tree Growth Capital invested Rs 10.9 crore in GEI Industrial in August 2009, picking up the stake at Rs 75 per share. The current deal represents a 3.3x upside to Banyan Tree’s initial investment.
Aditya Birla PE, that had its final close for its maiden fund early last year at Rs 880 crore, has existing investments from Aditya Birla Private Equity- Fund I in the country’s oldest and one of the two national stock exchanges Bombay Stock Exchange, credit rating agency CARE besides Anupam Industries, a manufacturer of material handling equipment.
BanyanTree has almost half a dozen investments in India. It had last year invested $15 million in Deepak Fasteners Limited, a manufacturer of speciality industrial fasteners, for an undisclosed minority stake. Its other portfolio firms include Mumbai based IT Infrastructure management services company Trimax IT Infrastructure & Services Ltd, synthetic rope manufacturer Axiom Impex Ltd besides Kalpena Industries, a manufacturer of PVC compounds.