AIF Capital has made a partial exit from its pre IPO investment in Yes Bank at 5.8x in five years time. The Hong Kong-headquartered private equity firm had invested in Yes Bank just after the bank was incorporated in late 2003. The original investment was estimated at Rs 21 crore made at a price of Rs 14 per share in March 2004.
Now, AIF has sold 2.2 million shares out of the 15 million it bought originally (and held on to since then) at an average price of Rs 83.45 translating into a deal worth Rs 18.4 crore ($3.6 million). AIF which had invested through Russel AIF Capital, still holds the remaining 12.8 million shares of Yes Bank which is valued at Rs 103 crore at last traded price.
Although AIF is still sitting on profits on its investments in Yes Bank, it potentially missed out on a much bigger booty. Yes Bank had hit an all time high of Rs 277.8 in January 2008 at the peak of the bull market. At that price AIF could have pocketed Rs 416 crore ($100 million at that time) or 20x return within five years. But the market crash has changed all that.
Meanwhile, another co-investor in Yes Bank, private equity firm ChrysCapital exited its investment with much better returns. ChrysCapital which also invested Rs 21 crore in March 2004 to pick the same number of shares (as AIF Capital) -- 15 million of Yes Bank had exited in 2007 through more than one tranches.
It is estimated that ChrysCapital sold the shares at a price which ranged between Rs 150-200/share translating into an exit value of somewhere around Rs 230-280 crore or 11-13x returns in three and half years.
Established in 1994, AIF Capital has received investor commitments for its funds, including co-investment, in excess of $1.5 billion. It provides capital for expansion, buy-outs or recapitalisation, primarily to unlisted companies. Some of its other investments in India include Bharti Infratel and Catholic Syrian Bank.
Its India investments is led by Ajay Lal who is also involved in deals for Indonesia, Philippines and Korea. Lal, an IIT (Delhi)- IIM (Calcutta) alumni, who joined AIF Capital in 1997 relocated to New Delhi in 2006 to head AIF Capital's office in India. Prior to joining AIF Capital, he worked with AIG Investment Corporation (India Head) and Bank of America (Vice President - Head Financial Institutions Group).
AIF Capital oversees a broad-based portfolio of investments in sectors ranging from supply chain management, financial services, manufacturing, speciality steels and engineering services, to power generation, telecom and transportation. AIF Capital’s investors include major corporate and government pension and investment funds, insurance companies and financial institutions from North America, Australia, Asia and the Middle East and Europe besides multilateral agencies such as IFC, and ADB.