Avendus Private Equity has acquired 1.7 per cent in Reliance Capital-backed Action Construction Equipment Ltd for Rs 6.6 crore ($1.48 million) on Monday. Bulk of this was acquired by J M Financial Mutual Fund.
Action Construction had raised funds last year through a preferential allotment to Reliance Capital which gave the financial services arm of Reliance ADA Group 3.2 per cent stake. The shares were issued at Rs 19.6 crore ($ 4.4 million).
The firm which generated revenues of Rs 427 crore with net profit of Rs 17.9 crore for the year ended March, 2010, gets almost two-thirds of its revenue from sale of cranes. The rest of the revenues come from material handling and other construction equipment, besides tractors.
Action Construction which raised around Rs 60 crore through a public issue five years ago, has used almost the entire sum for working capital management, new manufacturing plants and acquisitions. It has its production facilities in industrial township of Faridabad.
Last year, Mona Agarwal, a part of the promoter group, had subscribed to warrants at a price of Rs 41.45 a piece that will eventually lead to inflow of around Rs 21 crore at the time of conversion into equity. The promoter holding already stands at 65.6 per cent. Reliance Capital’s stake will accordingly shrink to 3 per cent after the warrants are converted by the promoters.
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