Private equity firm ChrysCapital has bought an additional 2 per cent stake in Blackstone-backed construction firm NCC Ltd (formerly Nagarjuna Construction Company) for around Rs 27.7 crore or $6.1 million.
ChrysCapital held 5.14 per cent in NCC as of June 30, and with the latest open market purchase, its holding has moved up to 7.1 per cent, just short of the holding of Norwegian sovereign wealth fund that held 7.63 per cent as of June 30.
ChrysCapital’s total investment in buying the stake is pegged around Rs 170 crore ($37.3 million), according to VCCircle estimates. The private equity firm had started buying into the company when the price was around Rs 98 a share. The latest stake buy is at a price of Rs 53.42, which means ChrysCapital is averaging out its high cost of initial investment. Bulk of the shares was purchased from HSBC Global Investment Funds.
The deal comes at a time when the 30-stock benchmark index Sensex touched its lowest level since February 2010.
NCC Ltd scrip dropped marginally 0.09 per cent on Friday to close at Rs 53.20 at BSE, valuing the firm at Rs 1,365 crore.
Incidentally, ChrysCap chief Ashish Dhawan, in his personal capacity, has an exposure to another infrastructure firm Gayatri Projects, which had been building business ventures in the infra space, specifically the power sector, with an arm of NCC Ltd.
Blackstone had invested in the Hyderabad-based firm four years ago, arguably at the peak market valuations. It 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 investments in the country.
Other prominent investors in the company include Rakesh Jhunjhunwala who, along with his wife, held 5.67 per cent as of June 30. Promoter holding in the infrastructure firm stood at 19.6 per cent, over a quarter of which is pledged with financial institutions.
ChrysCapital had early this year picked 8.8 per cent in mid-cap information technology firm KPIT Cummins Infosystems Ltd for Rs 112.5 crore through a preferential issue. Incidentally, Rakesh Jhunjhunwala was an early investor in the Pune-based KPIT Cummins which also counts among its present shareholders Norwegian sovereign wealth fund and Cargill Ventures.
See Our Earlier Report:
ChrysCapital Ups Stake In Blackstone-Backed NCC Ltd; Stock Falls