Three foreign institutional investor funds Emerging India Focus Fund, India Focus Cardinal Fund, Elara India Opportunities Fund have together picked 22.8% in flower exporter Karuturi Global by converting their warrants issued in mid-2009 into equity.
While Emerging India Focus Fund has bought 7% stake, India Focus Cardinal Fund will have 8.2% (post dilution) and Elara India Opportunities Fund will hold 7.6%. Emerging India Focus Fund had earlier converted a part of the warrants in August itself and its total holding stands at 7.45%.
These investors had picked the warrants at Rs 12 each. Karuturi scrip is trading at Rs 17.3 at BSE in mid-day giving the investors unrealised gains of almost 43% in their one-and-half-year-old investment.
The company had raised Rs 290 crore from its promoter Ramakrishna Karuturi and a consortium of four foreign institutional investors that also included hedge fund Monsoon Capital. Earlier, Monsoon Capital and the promoters had converted warrants into equity last year.
Promoters of Karuturi Global now own around 18% of the company. The world's largest producer of roses is engaged in three businesses - floriculture, gherkins and information technology. The company reported consolidated revenues of around Rs 550 crore with net profit of Rs 153 crore for the fiscal ended March 2010.
Karuturi Global had last year also raised money through private equity placement besides an overseas share issue. It had raised Rs 75 crore ($16.1 million) from funds managed by India's largest private equity firm IL&FS Investment Managers Ltd besides $24 million through a GDR issue as a part of its gameplan to expand its agri and floriculture business. It also acquired 54% stake in Mumbai-based Florista, which has a chain of floral designing boutique stores spread across India, at an undisclosed amount, as a part of its expansion drive.
Earlier, firms backed by serial entrepreneur C Sivasankaran had also acquired shares of Karuturi Global through open market purchases in what was apparently a treasury operation for the group even as Siva group firms had been fairly actively in investing in the agri-related sectors.