ChrysCapital Ups Stake In Blackstone-Backed NCC Ltd; Stock Falls

23 May, 2011

Private equity firm ChrysCapital has bought an additional 1.5 per cent stake to add to about 2.6 per cent it had recently acquired in Blackstone-backed construction firm NCC Ltd (formerly Nagarjuna Construction Company) for around Rs 35 crore, taking its total commitment to Rs 102 crore ($22.6 million).

 
ChrysCap entity Warhol acquired the shares at Rs 87.5 a piece, much lower than Rs 98.99 a share at which it initially invested earlier this month. This is less than half the price at which Blackstone invested in the Hyderabad-based firm four years ago, arguably at the peak market valuations.
 
Following ChrysCap’s initial stake purchase, the Norwegian sovereign wealth fund also raised its holding in the infrastructure firm to 7.5 per cent earlier this month.
 
NCC Ltd scrip dropped 2.65 per cent on Monday to close at Rs 86.35 at BSE, valuing the firm at Rs 2,215 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 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. 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 Jhunjhunwala who, along with his wife, held 5.4 per cent. Also, there was 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 Ltd for Rs 1,12.5 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.
 
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.

 


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ChrysCapital Ups Stake In Blackstone-Backed NCC Ltd; Stock Falls

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