Baring Private Equity Asia has increased the size of the stake it plans to buy in NIIT Technologies Ltd from the software services company’s public shareholders to 35% from 26%.
The buyout firm now plans to buy as many as 21.85 million shares instead of 16.23 million earlier, JM Financial Ltd, the manager to the open offer, said in a stock-exchange filing.
Assuming full acceptance of the offer, Baring will shell out Rs 3,045.47 crore ($445 million) for the shares compared with Rs 2,262.35 crore earlier.
Baring will pay Rs 1,394 per share in the open offer, which begins on July 15 and closes on July 26.
Shares of NIIT Technologies closed 1.3% higher at Rs 1,325 apiece on the BSE on Thursday.
The open offer is part of a bigger transaction that Baring sealed in April. The PE firm had then agreed to acquire a 30% stake in NIIT Technologies from its parent NIIT Ltd for about Rs 2,627 crore.
The open offer was originally scheduled to start in May, but has been delayed because regulatory approvals took longer than previously estimated. In the meantime, Baring has been buying shares of NIIT Technologies on the open market. The PE firm owned a 34.94% stake in NIIT Technologies at the June, regulatory filings show. This means that Baring may end up owning nearly 70% of NIIT Technologies if the open offer fully succeeds.
The deal increases Baring's exposure to the Indian IT services sector. The PE firm, which operates separately from Baring PE India, owns a 62.6% stake in Hexaware Technologies Ltd, stock-exchange data show.
Baring PE Asia had acquired a majority stake in Hexaware in 2013. It first bought 41.8% from then promoter Atul Nishar and PE firm General Atlantic, and picked up another 9-10% from homegrown PE firm ChrysCapital. It then raised its holding to 71% by acquiring an additional 20% stake through an open offer to public investors for Rs 816 crore in November 2013. Last year, Baring sold part of its stake in Hexaware.
The deal for NIIT Technologies is the PE firm's first major Indian investment since it raised a $6 billion fund in November 2017.
Over the past couple of years, Baring PE Asia has largely focussed on exiting its previous investments in India. In addition to its partial exit from Hexaware last year, it has also been attempting to sell part of its stake in CMS Info Systems, which offers cash management services as well as ATM products and services. Baring had acquired a controlling stake in CMS in 2015 for about Rs 2,000 crore. The company abandoned its IPO plan last year due to market volatility.
Baring's previous major exits include stake sales in cement maker Lafarge’s India arm and stock broking firm Sharekhan in 2015. The Sharekhan transaction was closed in late 2016.
In the last few years, keeping with the rising opportunities in debt and stressed assets, Baring has focussed on building its India credit vertical. It launched an India-dedicated credit fund in 2017 and is on the road to raise a larger $500 million credit fund.
Baring PE Asia operates from eight offices located in Hong Kong, Singapore, Tokyo, Shanghai, Beijing, Jakarta, Mumbai and Delhi.