Private equity firm ICICI Venture has completed its exit from Chennai-based VA Tech Wabag, which focuses on water and waste water treatment. Two funds managed by ICICI Venture sold 4.65 per cent stake in VA Tech Wabag on Monday on the National Stock Exchange for Rs 68.8 crore. The shares were acquired by Japan’s Sumitomo Corporation, one of the largest worldwide trading companies, according to NSE data.

Interestingly, the shares were sold by ICICI Venture at Rs 1,400 per scrip, which meant over 8 per cent premium to VA Tech’s closing price of Rs 1,290.35 per share. The shares were sold by ICICI Venture’s Dynamic India Fund I and India Advantage Fund I.

ICICI Venture, which had invested in one of the rare management buyouts of the firm from its Austrian parent, made around 6x-8x gross returns on its investment. Its overall stake sales in the firm, including the IPO and open market exits, came to over Rs 400 crore.

ICICI Venture had apparently invested a total of around Rs 50-Rs 60 crore when it backed the buyout from the company’s Austrian parent VA Tech WABAG GmbH in August, 2006. VA Tech Wabag, whose four promoters include British national Rajiv Mittal, Amit Sengupta, Shiv Narayan Saraf and S Varadarajan, raised around Rs 125 crore through fresh issue of shares late last year. Financial investors made Rs 353 crore, with ICICI Ventures itself getting Rs 134 crore through shares offered for sale.

VA Tech has presence in drinking water, municipal waste water, industrial water, industrial waste water and desalination, and is said to be evaluating both organic and inorganic growth opportunities. Some of its competitors include Veolia Water India, Degremont India, Hindustan Dorr Oliver and L&T in the municipal sector and companies like Thermax, Ion Exchange, EIL, Hindustan Construction, Nagarjuna Constructions, Gammon India and Driplex in the industrial sector.

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