New York Life Investment Management-backed Commercial Engineers & Body Builders Co Ltd (Cebbco) has made a modest debut on the stock exchange listing 3.3% below issue price of Rs 127. It hit an intra day high of Rs 144.8 before sliding down and in early morning trade is quoting Rs 123.7, 2.5% below issue price.
The company, that is into manufacturing vehicle bodies for commercial vehicles, refurbishment of wagons and manufacturing of components for wagons, coaches and locomotives for Indian Railways, is promoted by Jabalpur-based Gupta family led by Kailash Gupta and Ajay Gupta (son-in-law of Kailash Gupta).
The group business is largely associated as collection and recovery agents besides dealerships for vehicles made by Tata Motors (the country’s largest commercial vehicle maker) in Madhya Pradesh and other part of states adjoining central India.
New York Life Investment Management India Fund (FVCI) II Llc made a part-exit from its three-year-old investment in Cebbco with an estimated 4x returns. New York Life Investment Management India Fund’s holding has got diluted to 12.2% from 23.3% pre issue. The private equity fund had invested Rs 30 crore in the manufacturing company three years ago with an average investment cost of Rs 30 per share.
The promoters also sold a portion of their 76.5% holding and their combined ownership has whittled down to around 52% post issue. Financial institutions bet big on the issue and together hold as much as 45% of the company.
Cebbco intends to use the issue proceeds from the fresh sale of shares for capital expenditure for a railway project besides prepayment of identified loan facilities.
For the nine months to end December’09, Cebbco had total income of Rs 111 crore with net profit of around Rs 10.6 crore.