Frontline Strategy exits Valiant Communications, Alfa Transformers with huge loss

Strategic Ventures Fund (SVF), managed by Indian private equity firm Frontline Strategy, has exited two of its eight-year old investments in Valiant Communications Ltd and Alfa Transformers by selling its entire stake in the companies, incurring a loss of around 70-80 per cent, not counting dividends, if any.

SVF had invested Rs 3.9 crore in Valiant Communications through a preferential allotment way back in October 2005.

As on December 31, 2013, SVF owned 7.45 per cent equity stake in Valiant Communications while the promoters of the company held 36.95 per cent equity stake.

The PE fund has exited its stake in four tranches through open market transactions. Initially, the company offloaded a total of 62,000 equity shares in September 2012 in two tranches. Thereafter, the PE fund divested remaining 538,000 equity shares early this month.

Valiant manufactures telecom transmission equipment with installations in over 80 countries.

In the case of Orissa-based Alfa Transformers, the PE firm had invested around Rs 5.2 crore in 2006 and exited in three tranches starting last year, pocketing a total of just Rs 1.6 crore.

Alfa Transformers makes power and distribution transformers and related products.

Frontline Strategy has been active in the India PE scene for more than a decade and has raised two funds—Strategic Ventures Fund and India Industrial Growth Fund. So far, it has invested in over a dozen Indian companies, including Shilpa Medicare, Krishna Saa Fabs, Shriram SEPL Composites, Supreme Telecommunications, among others.

(Edited by Joby Puthuparampil Johnson)

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