Sequoia Capital has exited its investment in Manappuram General Finance & Leasing by selling its 11% stake for around Rs 293 crore in the open market. Back of the envelop calculations show the PE firm would have struck gold in its two-and-half-year-old investment in the Kerala-based NBFC.
VCCircle first broke the news on Friday ahead of the public disclosure of the bulk share deals by the Bombay Stock Exchange. The bulk deals transactions shows indeed Sequioa has sold off all its stake at Rs 740 a piece translating into 7.4x returns.
A bulk of the shares were purchased through convertible preference shares at Rs 100 a piece. Sequoia later also invested in another group firm Manappuram Finance (Tamil Nadu) Limited, that eventually merged with Manappuram General Finance.
Post amalgamation, Sequoia held as much as 3.9 million shares and sold all its shares, in one of the single largest PE exits in recent times. The sharp spike in trading volume had indicated that Sequioa had made a move with trading of as many as 4.2 million share of the firm at BSE alone against the two week average of just 30,000. Majority of the shares were bought by few FIIs.
Other investors in Manappuram General Finance include Hudson Equity, a fund managed by India Equity Partners that co-invested with Sequoia in 2007. Thereafter the NBFC raised further rounds of investments from US-based private equity fund Granite Hill besides UK-based Alchemy Ashmore-- a joint venture between Alchemy and Ashmore.
Services offered by Manappuram include deposits, gold and vehicle financing, forex and general and life insurance. It had also entered into an alliance with IDBI Fortis Life Insurance Company Ltd to provide wealth building and insurance products to customers in Kerala.