Elephant Capital sold a further chunk of shares of public listed IT education firm NIIT Ltd in April as a part of its plans to exit from the investment. The AIM-listed India-focused private equity firm, co-founded by Gaurav Burman of Dabur family, sold around 1 lakh shares of the remaining 6.6 lakh shares of the Delhi-based company.
The shares were sold for a total consideration of £106,000. The partial exit resulted in a realised gain of £35,000 as against the original cost of £ 71,000 for purchasing this chunk of shares.
“We have made some opportunistic sales post period end, and as soon as market conditions allow, we would intend to fully exit this investment,” said Pramath Raj Sinha, chairman of Elephant Capital in a statement.
Elephant Capital had sold around three fourths of its total holding in NIIT few months back achieving an IRR in excess of 25%. Post that selloff, it held 0.66 million shares, representing 0.4% of NIIT.
The PE firm had picked up around 1.5% stake in NIIT for around Rs 15.5 crore through secondary market purchases between March and November 2008. According to calculations done by VCCircle, its average cost of acquisition was around Rs 59/share. NIIT share is currently trading at Rs 58.9.
For Elephant Capital– that raised £50 million in early 2007 through a public float at the AIM market in London– this is the second portfolio from which it has initiated a liquidity event. It had earlier made a partial exit from EIH Ltd, which runs the Oberoi Group of Hotels.
Meanwhile, the PE firm reported net profit of £2.8 million for the six months ended February 28, 2010 compared to net loss of £6.2 million for the corresponding period last year, as per its interim financial report.
Elephant Capital has investments in six companies till date including EIH Limited(Hospitality),Mahindra Forgings Limited(Automotive), NIIT Limited(Education) and Nitco Limited(Building Materials) as public listed companies. It also has exposure in two unlisted firms Obopay Inc(Mobile Banking Services), and Global Cricket Ventures Limited(Sports Media).
Global Cricket Ventures Ltd that owns internet rights of streaming cricket matches of Indian Premier League was under the thick of things given speculations on how the firm secured the rights in which a relative of IPL chief (Gaurav Burman is son-in law of former IPL chief Lalit Modi) invested thereafter.
In a statement, Elephant Capital said, “We are aware that there is speculation in the Indian press relating to the manner in which the internet rights to the Indian Premier League (IPL) tournament were granted and we understand that the Board of Control for Cricket in India (BCCI) may be investigating this. One of our investee companies, GCV, holds certain internet and mobile rights relating to the IPL, that were acquired before Elephant Capital invested in it.”
“Neither Elephant Capital nor GCV has been approached by the BCCI or any other authority in connection with this. Should Elephant Capital or GCV be so approached, we would, of course, extend our fullest co-operation. I would like to take this opportunity to reassure shareholders that Elephant Capital has consistently been transparent in its dealings with GCV and maintains the highest standards of corporate governance,” said Pramath Raj Sinha in his chairman’s statement in the interim results report.