Standard Chartered Private Equity-backed engineering firm Innoventive Industries Ltd has set a price band of Rs 117-Rs 120 for its public issue opening on April 26, which will provide an unrealised gain of up to 9 per cent to Standard Chartered PE on its pre-IPO investment.
Standard Chartered PE had picked 10.14 per cent stake in the Pune-based company through a mix of share purchase from non-promoters, besides a fresh issue of shares, two months ago. The fresh issue was at Rs 117, which is the lower end of the price band, but the share purchased from promoters was at a discount to this price that brings down the investor’s cost of purchase even at the pre-IPO level. This can be a harbinger of a new trend where promoters provide a valuation cushion to even pre-IPO investors.
In total, Standard Chartered PE picked the stake through two funds for Rs 46 crore or just over $10 million.
Another private equity investor Lighthouse Funds would be sitting on unrealised gains of around 88-93 per cent on its investments. Kavos Capital, a special purpose vehicle set up by India 2020 Ltd (a private equity fund sponsored by Lighthouse Funds), had originally invested Rs 15 crore in June, 2008, and was allotted fresh shares last July under a bonus issue in which other shareholders or essentially the promoters gave up their right to subscribe to new shares.
Kavos brought in additional Rs 35 crore through a preferential allotment in August and its total holding of around 8 million shares representing 19.58 per cent has the average cost of purchase pegged at Rs 62.2 per share.
Innoventive is looking to raise Rs 219.58 crore through the public issue that will be used for capacity expansion (Rs 163 crore) and repaying term loan (Rs 50 crore).
The company is into the manufacturing and sale of precision steel tubes, tubular components, auto components, machined components and other steel products which find application in diverse industrial sectors such as transportation, oil & gas, power, farm equipment and general engineering. It has six manufacturing facilities, located across Pune and Silvassa.
It is promoted by first-generation technocrats who acquired the company in 2002. Its key customers include Bajaj Auto, Bhel, Thermax, John Deere India, Sundram Industries, Gabriel India Limited and Alstom Projects Ltd.