Ahmedabad-based Deep Industries Ltd has raised private equity funding worth $20 million (around Rs 136 crore) from Tridevi Capital Partners through its subsidiary company Prabha Energy Private Ltd (PEPL), it said in a statement.
The investment, made through subscription of compulsorily convertible debentures, will represent 40% stake in PEPL on a fully-diluted basis upon conversion in equity shares. The deal values PEPL at $50 million.
This is among the first private equity investments in the coal-bed methane (CBM) sector in India and possibly the first project-based investment in oil and gas sector in the country, it said.
The funds would primarily be used for capital and operating expenditure for the development and production of natural gas from the coal-bed methane block located in North Karanpura coal field (NK-CBM) in Jharkhand. PEPL holds 25% participating interest NK-CBM Block.
Deep Industries was incorporated in 1991 and promoted by Paras S Savla and Rupesh K Savla. It has four lines of business—gas compression, work-over rigs, marginal gas fields and exploration of coal-bed methane.
It formed group firm Deep Energy in 2008-09 in the US to scout for oil-exploration opportunities in the overseas market. It incorporated yet another firm Deep Natural Resources in 2009-10 for exploration, production and development of crude oil, coal-bed methane and natural gas.
PEPL was formed in 2009-10 for electricity generation by conventional and non-conventional methods.
Mazars India acted as the financial advisor to the deal. Krishnamurthy and Company (K Law) acted as legal counsel for PEPL while Luthra & Luthra Law Offices acted as legal counsel for Tridevi Capital.
The company reported revenues of Rs 169 crore and a net profit of about Rs 41 crore in FY2015-16. The promoter group owns about 70% stake in the firm.
Shares of the Deep Industries rose to 301.05, up 3.45% on a weak Mumbai BSE market.
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