Private equity firms are increasingly adopting secondary market exits. In one of the latest such deals, IDFC Private Equity has sold a small part of its stake in Gujarat State Petronet Ltd (GSPL) via open market transactions. The fund has sold a 0.58% stake for Rs 12.66 crore on the National Stock Exchange on Wednesday. The shares have been sold at a price of Rs 39.1 per share. The buyer is not known.
IDFC Private equity invested Rs 90 crore in GSPL, a company involved in gas transportation business, in late 2004 for a little more than 20% stake. The stake got diluted as GSPL roped in more investors and also went in for an IPO after which IDFC PE stake went down to 13.28%. Since then the private equity fund's shareholding in
GSPL has come down to 2.52% as of December 2008. IDFC PE had picked up the stake in GSPL for Rs 12.5 per share. The company came out with a public issue in 2006 with a price band of Rs 23-27 per share, which doubled IDFC PE's return on the investment. Though IDFC PE did not participate in the IPO by selling part of its stake, it has pared down its holding through the years.
Through a bulk deal on November 2007, IDFC PE offloaded nearly 19 million shares in the company at a price of Rs 74 per share netting nearly Rs 140 crore. IDFC PE held 72 million shares in GSPL at post-issue stage in 2006 and as of December 2008, it holds a little
more than 14 million shares. The other deals in which IDFC PE sold the stake could not be tracked.
PE Funds Making Best of Market Rally
Several private equity funds who have investments in listed companies seem to be making the best of market rally. The BSE benchmark has risen by nearly 10% since March with Sensex crossing the 10,000 point mark. Only last week Citigroup Venture Capital International sold
nealy a 5% stake in Techno Electric & Engg Company in the markets. Then on Friday last week, UK-based 3i Group also sold 1.42% stake in Mundra Port and Special Economic Zone Ltd for a total sum of Rs 165.33 crore.
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