Private equity firm ChrysCapital has bought about 2.6 per cent stake in Blackstone-backed construction firm NCC Ltd (formerly Nagarjuna Construction Company) for around Rs 67 crore (~$ 15.3 million). Bulk of it was acquired through open market transaction from HSBC Global Investment Fund.
ChrysCap entity Warhol acquired the shares at Rs 98.99 a piece on Tuesday, almost half the price at which Blackstone invested in the Hyderabad-based firm four years ago, arguably at the peak market valuations.
NCC Ltd scrip dropped 1.9 per cent to close at Rs 98.15, valuing the firm at Rs 2,518 crore.
Incidentally ChrysCap chief Ashish Dhawan in his personal capacity has an exposure to another infrastructure firm Gayatri Projects, that had been building business ventures in the infrastructure, specifically power sector, with an arm of NCC Ltd.
Blackstone had originally invested over Rs 400 crore to pick around 10 per cent stake in NCC Ltd and had also got the right to subscribe to equity convertible warrants. However, the firm eventually did not convert the warrants into shares within the stipulated time, blaming it on pending approval for the deal from FIPB, the nodal government body clearing foreign investment in the country. Incidentally, the share price had dropped sharply at the time the deadline for converting the warrants expired.
As of March 31, Blackstone owned 9.9 per cent in NCC. Other prominent investors in the company include Rakesh Jhunjhuwala who alongwith his wife held 5.4 per cent, besides Norway’s sovereign wealth fund Government Pension Fund Global holding 6.83 per cent, among others. Promoter holding in the infrastructure firm stood at 20 per cent, a quarter of which was pledged with financial institutions.
For ChrysCapital, this would be the second investment this year. It had picked 8.8 per cent in mid-cap information technology firm KPIT Cummins Infosystems Limited for Rs 1,12.5 crore through a preferential issue. Incidentally, Rakesh Jhunjhunwala was an early investor in the Pune-based KPIT Cummins that also counts amongst its present shareholders Norwegian sovereign wealth fund and Cargill Ventures.
This was after a successful history of profitable investments and exits in the IT space including names like Mphasis BFL, Spectramind and most recently the $400 million exit from IT bellwether Infosys Technologies. ChrysCap’s other recent buys include Rs 100 crore investment in Pratibha Industries Ltd, an infrastructure solutions provider in the water management and urban infrastructure space.