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Baring India Private Equity has started yet another part exit from IT solutions firm Mphasis. After selling out almost two- thirds of its 35% holding to EDS in 2006, the PE firm had bought more shares from the market during September’08-March’09 and held 10.1% as of December'09. It has sold around 2.3% since the beginning of the year.

Although Baring had reportedly cashed out by selling out all its holding in Mphasis when EDS acquired the company in mid-2006, shareholding structure shows Baring continued to own around 10% stake post the EDS deal.

Baring’s stake fell from 34.79% in March’06 to 11.3% as of June 30 that year. It sold some shares in the September-December’06 quarter and again in January-March’07 period. Thereafter it had been holding on to its shares and in fact bought more shares between September’08-March’09 (when the markets had bottomed out and the shares were trading around Rs 130-150 a piece) apparently through its new fund. As of March ‘09, it owned as much as 12.53% in Mphasis, through two investment entities.

The PE firm had begun part exit in the June-September’09 quarter when prices ranged between Rs 350-660. This means Baring netted anywhere between 3-4x returns for its less than one-year-old fresh investments when the market had crashed. It also sold a quarter of shares held by another entity which has been holding on to the shares for much longer and could have earned an even bigger multiple.

The latest share sale has happened at a time when the shares traded between Rs 650-750 that means the new fund would have made returns of 4.5-5x on its one-and-half-year-old investment.

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