Citigroup Venture Capital International (CVCI) has sold 7% of its 10.4% holding in Jindal Drilling with an estimated 11% haircut (not factoring in dividend earnings if any). CVCI had picked the stake at the peak of the bull run in the stock market in January 2008 and had been holding on to its stake all this while.
CVCI had invested Rs 153 crore picking a little over 10% stake through a preferential allotment. Accounting for changes in capital structure, it has an average cost of purchase of Rs 640 per share. On Thursday, it sold 7% stake at a price of around Rs 570 per share in the open market, earning Rs 90.5 crore.
Part of DP Jindal Group, Jindal Drilling & Industries Ltd is engaged in offshore drilling and allied services. It has five rigs in operation of which two are owned by the company itself. For the year ended March’10, the company had revenues of Rs 1,195 crore with net profit of Rs 84 crore.
Part exit from Jindal Drilling comes close on the heels of total exit from another portfolio company JBF, where the private equity firm held 33% stake in the Singapore arm of the company. CVCI apparently exited the subsidiary of the polyester chips maker with 38% return on its three-year-old investment.
CVCI had also sold a large chunk of its stake in six-year-old investment in drug and chemical maker Jubilant Organosys and also real estate firm Emaar MGF in the recent past. CVCI had invested Rs 228 crore in November 2006 in Emaar MGF that was bought over by Emaar in August this year for around Rs 277 crore, ahead of its proposed public float.