IL&FS Private Equity has churned its investment in the country’s largest cable television company Den Networks Ltd by part-selling its pre-IPO investment through a jointly sponsored fund with Standard Chartered to another group entity IL&FS Infrastructure Equity Fund.
Standard Chartered IL&FS (SCI) Asia Infrastructure Growth Fund sold 1.7% or over a quarter of its 6.2% holding in Sameer Manchanda-promoted Den Networks for around Rs 23 crore (~$5.3 million) to IL&FS Infrastructure Equity Fund on Thursday. The shares were sold at Rs 100.9, almost half the issue price at which the company raised money one and half years ago.
SCI Asia Infrastructure Growth Fund had picked the shares after conversion of preference shares at a price of Rs 146.94 per share. This means the particular joint fund took a haircut of 31 per cent on the transaction.
Den Networks share price had come under severe hammering in the past few months after its earnings couldn't sustain in the past few quarters. The share price had dropped almost 70% after hitting a high in August to just Rs 78 early this month but has bounced back since then to make up for the sharp fall.
Den competes with another PE-backed firm Hathway, which had raised money from ChrysCapital in the past, in the growing market for home entertainment. The government has set new deadlines for complete digitisation in the country that will lead to consolidation in the cable business as small operators will be unable to invest in infrastructure to meet the norms.