Private equity firm ChrysCapital has bought additional 1.68 per cent stake in Blackstone-backed construction firm NCC Ltd (formerly Nagarjuna Construction Company) for around Rs 23.1 crore. With this transaction, the private equity firm has increased its stake to nearly 9 per cent in the Hyderabad-based company.
With this purchase, ChrysCapital will become the second largest institutional shareholder in the company after PE giant Blackstone, who had paid Rs 400 crore (approx.) to pick up around 10 per cent stake. Other investors like the Norwegian sovereign wealth fund and Rakesh Jhunjhunwala also hold shares in NCC.
ChrysCapital held 5.14 per cent in NCC as of June 30, and increased its stake by another 2 per cent last week. With the last two set of transactions, ChrysCapital is now averaging its investment in the company, which initially started at Rs 88-Rs 99 per share. It has also made recent investments in the company at a share price of Rs 53-Rs 54.
The share price of NCC rose over 9 per cent in the morning and was trading at Rs 58.1 per unit at 12:23 pm, still up 7.59 per cent.
NCC Ltd had reported 6.1 per cent increase in net sales to Rs 5073.8 crore, with net profit slipping 15 per cent to Rs 163.4 crore in FY11. For the June quarter, it reported 5 per cent top line growth to Rs 1141 crore, with the bottom line at Rs 23.3 crore.
“The management has guided for top line of Rs 5,900 crore and order inflow of Rs 9,000 crore in FY12. However, concerns remain on equity requirement for the power plant and NCC’s aggressive plan in the road segment. Nonetheless, the current valuation discounts most of the negatives in the stock,” a recent report by ICICI Securities stated about the company.
ChrysCapital Raises Stake To 7.1% In Blackstone-backed NCC