With the stock market valuations on an upswing in the beginning of the new year, two private equity majors have made best of the window by offloading part of their stakeholding in portfolio companies. The Carlyle Group and Warburg Pincus have taken out more than Rs 2,200 crore(~$440 million) together from the markets on Wednesday through separate block deals.
While Carlyle made a partial exit in India’s largest mortgage lender Housing Development Finance Corp(HDFC), Warburg Pincus continued its exit from private sector lender Kotak Mahindra Bank Ltd.
In the first deal, Carlyle sold over a fourth of its stake its stake in HDFC for Rs 1,355 crore. In 2007, along with Citigroup, Carlyle participated in the Rs 3,114 crore ($767 million) investment in HDFC. Carlyle led the round with putting Rs 2,638 crore (or $650 million back then) for 15.25 million new shares in HDFC, allotted at Rs 1,730 a share.The shares were later split in 1:5 ratio, before which Carlyle also picked up some shares in October-December 2008 for another Rs 20-30 crore.
As of December, 2011, Carlyle held a 5.22 per cent stake and its average investment price comes at Rs 344 per share. The latest sale was at Rs 677.21 a share, almost giving the buyout major 2x returns. Theshare price of HDFC closed at Rs 687.8, down 1.28 per cent on BSE on Wednesday.Carlyle’s remaining 57 million shares are valued at Rs 3,920 crore at today’s closing price.
Last year,Citigroup also cut its stake in HDFC which also counts Aberdeen and the Singapore government as its investors.
In another bulk deal, Warburg Pincus continues to sell its stake its stake in Kotak Mahindra Bank. In the latest round, its has sold off 2.3-2.4 per cent stake in the bank for Rs 857 crore. Combined withearlier stake sales last year, its has sold shares worth nearly Rs 2,000 crore in the Uday Kotak-led bank.
The latest sale was done at Rs 490 per share, while the share price of the firm closed at Rs 509.2, up by 2.31 per cent on the BSE. Its existing stake, around 3.5 per cent, is valued at Rs 1,350 crore attoday’s closing price.
Warburg Pincus, which has more than $30 billion in assets under management, had initially picked up 2.75 per cent stake in Kotak Mahindra Bank in late 2004 for Rs 75.9 crore, through a fresh issue ofshare. And it continued to acquire shares in the bank through market transactions as the Uday Kotak-led promoter group was shedding its stake to meet RBI norms. Warburg Pincus also got RBI permission in2005 to increase its stake in the bank up to 10 per cent.Although the exact investment by Warburg in Kotak Mahindra Bank could not be ascertained, Warburg could have reportedly made anywhere between 4x-5x on its investment.