BCCL Sells Chunk Of Shares In Provogue

Media firm Bennett Coleman & Company Ltd that picks minority stake in companies through ad-for-equity deals appears to be on the exit mode from fashion apparel retailer Provogue. BCCL has sold close to two-thirds of its 1.74% stake in Provogue for Rs 6.3 crore ($1.3 million).

This works out to be the second round of exit by BCCL, a pre IPO investor in the company. It had invested Rs 7 crore in February 2005, just prior to the public float. BCCL sold almost half of its holding in the September-December’07 period netting a neat pile of around Rs 20 crore or 6x net returns on the cost of acquisition in less than three years.

However, with the market crash thereafter, the unrealised gain came down. BCCL acquired more shares(apparently through market purchases for an estimated Rs 2.5 crore) early last year when valuations hit a bottom, but that pushed up its average cost of purchase a bit.

It held around 1.74% stake with an average cost of purchase pegged at about Rs 33 a piece (Rs 28 a piece before the additional stake buy). The investor sold almost 1% stake in the open market at a price of Rs 53.4 with 60% returns this week.

Provogue is also backed by other investors such as Rakesh Jhunjhunwala, Acacia Partners and New Vernon. Jhunjhunwala is also a pre IPO investor who remains with the firm.

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