BanyanTree Growth Capital LLC, a Mauritius based private equity fund, has picked up nearly a 10% stake in Bhopal based GEI Industrial Systems. GEI is engaged in the manufacturing of air cooled heat exchangers, air cooled steam condensers, and associated systems for oil, gas and power sectors.
The private equity fund is picking up the stake for around Rs 11 crore. BanyanTree will have a board representation. Mumbai based Singhi Advisors were the sole financial advisor to GEI Industrial Systems in the deal.
GEI's FY09 revenues stood at Rs 213 crore, as compared to Rs 186 crore a year earlier. The net profit for FY09 stood at Rs 10.3 crore, as compared to Rs 9.2 crore in FY08. The stake has been picked at a price of Rs 75 per share. GEI stock, which closed at Rs 63.85 yesterday, was up by more 10% touching a high of Rs 71.5 per share before settling down at around Rs 68.
Promoted by first generation entrepreneur C.E. Fernandes, GEI is a leading provider of heat transfer solutions to the oil and gas and the power sector. GEI specializes in air cooled heat exchangers and steam condensers.
A Centre for Science and Environment 2001 report said that thermal power plants discharge 27 trillion liters of waste water in India and accounted for over 85% of total industrial water consumption. GEI’s products help reduce the water footprint of these plants and the firm plans to grow on the increased awareness about the environment. The new funds will be used to expand its current production facility and its product offerings.
BanyanTree has made two other investments this year. Its investments include Kalpena Industries, a manufacturer of PVC compounds; IT Infrastructure management services company Trimax IT Infrastructure & Services and synthetic rope manufacturer Axiom Impex.