Burwood Ventures has signed off its investment in knowledge process outsourcing (KPO) firm eClerx in style. The investment firm, that had acquired 21% stake before the company went public in late 2007, is estimated to have exited with ‘net returns of 55x’ in its five-year-old investment.
Burwood sold its remaining holding that stood at 5.5% as of March 31 in the open market for around Rs 58 crore over the last two days.
Part of the shares were bought by Norwegian bank Norges Bank on behalf of the sovereign wealth fund of Norway (Government Petroleum Fund).
Burwood had originally invested a mere Rs 78 lakh in March’05 and put in a further Rs 2 crore in August’07, just before the IPO of eClerx. It sold a part of its holding during the public offer garnering Rs 5.6 crore. So it encashed 2x within three years of investment.
Post IPO, it owned 17% of the company and sold a further 6.8% to Sequoia last August for Rs 43 crore. In March this year, it cut its holding by around half encashing over Rs 50 crore in the process. With the latest selloff on Wednesday and Thursday, the investment firm has in total encashed Rs 157 crore till date from an investment of around Rs 2.8 crore making it one of the most profitable VC/PE investment in India till date, as per VCCircle estimates.
The average cost of acquisition for Burwood is pegged at around Rs 8 per share as against the ruling price of Rs 650 a piece.
The Mumbai-based firm had raised around Rs 100 crore in late 2007, through a mix of fresh issue and offer of sale from the promoters and Burwood Ventures. Formed in 2000, the company provides data analytics and data process management services to the retail, manufacturing and financial services industries.
The company is promoted by P D Mundhra and counted among its minority investors Lehman Brothers and Dell Computers at the time of the IPO. Sequoia that bought stake in the firm from Burwood last year raised its holding early this year and held around 10% as of March, 31. Lehman Bros investment arm continues to own shares in the firm but its not known if Dell also remains invested in the KPO.