Henderson Equity Partners completes exit from HT Media pocketing over 3.4x return

Henderson Equity Partners completed its exit from HT Media Ltd, the publishers of the English daily Hindustan Times and the business newspaper Mint, by selling its remaining 3 per cent stake on Tuesday. The stake, a little over 7 million shares, was sold for Rs 52.69 crore on the National Stock Exchange.

Henderson sold HT Media shares at Rs 75.03 per unit to Amansa Capital, Reliance Savings Fund and SBI Life Insurance. HT Media was trading at Rs 85.15, up 3.02 per cent at noon on Thursday giving

the firm a market capitalisation of Rs 1,996.77 crore.

According to VCCircle estimates, Henderson would have made a total of around Rs 400 crore on the investment giving it a multiple of over 3.4x.

Henderson, which pumped in a total of Rs 117.5 crore in three tranches between 2004 and 2005, has an average acquisition price of around Rs 40 per unit. Citi Venture Capital International had also invested in HT Media along with Henderson, but it exited in 2009.

Henderson sold 5 per cent stake during HT Media’s IPO in 2005 for Rs 125 crore (thereby getting its principal back) and sold some stake in 2010-11.

In 2010, it sold nearly 3 per cent stake for Rs 118.5 crore and a year later sold 1.8 per cent more for Rs 71 crore. In June this year, it sold 1 per cent stake for Rs 23.5 crore. These part exits were done at a higher return multiple compared with the sale of the latest tranche.

HT Media reported a 2.3 per cent increase in income to Rs 2,048 crore in FY13 with profit after tax up 1.3 per cent to Rs 167.7 crore compared to the previous fiscal. For Q1 FY14, it reported a 10.4 per cent increase in revenues to Rs 540.9 crore with PAT up 17 per cent to Rs 47.5 crore.

"Though international newsprint prices have been falling, the rupee depreciation has limited gains for the company. The Hindi ad revenue has kept up its growth trajectory while the English ad revenue posted a better growth than Q4 FY13. We expect ad growth to remain on the higher side, subsequently, owing to a low base and improving ad scenario," said an ICICI Securities report on the company.

(Edited by Joby Puthuparampil Johnson)

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