Baring Private Equity Partners India has exited from its investment in Gi Terminal i-Tech Pvt Ltd, a Chennai-based online gaming solutions company that develops solutions for the lottery market, a senior official told VCCircle.
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The private equity fund has exited its investment completely in an M&A transaction. Rahul Bhasin, Managing Director, Baring Private Equity Partners India, declined to give the name of the buyer and the value of the transaction. BPEP invested in the company in early 2007. The amount invested then is also not known.
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Bhasin told VCCircle that they are planning a couple of exits this year. “We are planning a few exits, they are in the pipeline,” he said, in a recent interview to VCCircle.
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With the Sensex still hovering around 17, 000, down from the levels of 22,000 early this year, not too attractive a market from an exit view point, Bhasin added that these exits are not driven by any kind of liquidity pressures. A few PE funds have been making exits to get some liquidity out in this tough environment. “We have cumulatively returned more capital than we have taken from investors,” said Bhasin who manages a fund which currently has an uncommitted capital of $600 million.
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“We need to ask ourselves if, in this new environment, we are adding any value to the company. And, if we are not, then we have no business to be in that company,” said Bhasin, on his exit rationale.
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BPEP has been slowly and steadily making a few exits. Baring India Private Equity Fund III and Baring India Investments Ltd, funds managed by Baring Private Equity Partners India Ltd, sold 4.39 million shares in Mphasis Ltd (about 2%) at a price of Rs 431.30 in the open market to aggregate $39.14 million. Post transaction, the fund still holds about 10% in the company with Baring India Private Equity Fund III holding 4.65% stake and Baring India Investments holding 5.75% in the company. Mphasis provides global infrastructure technology outsourcing, applications services outsourcing and business process outsourcing services. On whether Baring will ever exit Mphasis completely, Bhasin said, “my cost of capital at 25% is compounded. If I can earn more than this, why should I exit? The growth rates expected from the company are way higher than that.”
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Another company that has been sitting on BPEP’s portfolio since late 2006 is Auro Mira Energy, which has been doing rounds of raising a second round of capital. Bhasin is not keen to make a quick exit here. “Not in next five years. It is a capital-hungry business so it will keep on needing capital. The growth rates planned are in triple digits. The IRRs in the business are phenomenal,” said Bhasin. Auro Mira Enery is a Chennai-based company engaged in the setting up and sale of wind farms.
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While the private equity firm is looking at exits, it is also looking at an acquisition-led growth for its portfolio companies. BPEP-backed Integra Software Services recently concluded an acquisition of a company in the US.
