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Aditya Birla PE Invests Rs 62.5Cr In GEI Industrial Systems

By Pallavi S

  • 31 Jan 2011

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.

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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.

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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.

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