There is lots of market action expected from the quarters of three infrastructure companies, VA Tech Wabag, Ramky Infra and Orient Green Power, whose IPO price bands are out. VCCircle brings you the math.
IL&FS PE will make part exit with 2.6x returns on its four-year-old investment in Ramky Infra at the upper end of the Rs 405-468 price band of the issue. The infrastructure firm is looking to raise Rs 350 crore through fresh issue besides Rs 180 crore worth of shares offered for sale by promoters along with IL&FS PE’s Tara Fund.
Sabre Capital through Sabre Abraaj Fund I is also an existing investor with 8.4% stake and is staying put with its investment. Sabre Capital and IL&FS PE had together invested around Rs 125 crore of which three-fifths was invested by Sabre Capital in December’06. As per VCCircle estimates, both the firms have average cost of purchase of shares of Rs 180 per share.
At the upper end of the price band, IL&FS PE will be selling a little less than a quarter of its holding of 5.6% (pre issue) netting Rs 30 crore compared with the cost of purchase of those shares that is estimated at Rs 11.5 crore. IFC is also a minority investor owning 0.8% stake before dilution.
At the upper end of the price band the company will be valued at around Rs 2,639.5 crore ($565 million) and Sabre Capital’s stake will be worth Rs 195 crore.
VA TECH WABAG
ICICI Venture will be making a killing with the listing of its portfolio company VA Tech Wabag. The proposed issue of water management solutions firm VA Tech Wabag at the upper end of the price band will give it a valuation of Rs 1,218 crore. This would mean a multibagger for ICICI Venture. It is estimated the private equity firm along with the management paid out somewhere in the region of around Rs 50-60 crore to acquire majority equity holding in the company.
One of the rare management buyouts in India, ICICI Ventures had backed the buyout of the company from its Austrian parent VA Tech WABAG GmbH in August 2006.
The engineering services company that focuses on water and waste water treatment, VA Tech Wabag is backed by a host of private equity investors and some are making part exit including ICICI Ventures and others such as GLG Emerging Markets Fund, Sattva India Opportunities Co and Passport India Investments.
VA Tech Wabag is looking to raise Rs 125 crore through fresh issue of shares which would be separate from the offer for sale by the existing investors. Offer for sale will net as much as Rs 354 crore in the public offer at the upper end of the price band of Rs 1,230-1310 per share.
GLG had invested Rs 88 crore or about $20 million in February 2007 which translates into 9.55% stake currently with average cost of acquisition pegged at around Rs 988 a piece.
The company has four promoters led by British national Rajiv Mittal who owns 21.6% pre IPO followed by Amit Sengupta (5.6%), Shiv Narayan Saraf (5.11%) and S Varadarajan (5.11%). They will also be big gainers in the IPO. The cost of acquisition of shares for these four executives is pegged between Rs 3-7/share.
ORIENT GREEN POWER COMPANY
At the upper end of its issue price band of Rs 47-55 a share, PE-backed Orient Green will be valued at Rs 2,420 crore ($520 million). Bessemer Venture Capital and Olympus Capital-backed renewable energy firm Orient Green Power Company is looking to raise Rs 900 crore through a public float.
The money is to be used for funding expansion of multiple biomass power projects besides funding subsidiaries for wind power and biomass power generation and repayment of debt worth about Rs 150 crore.
Both Bessemer and Olympus are invested in the company through direct and indirect route. The principal backer of Orient Green is Shriram EPC which in turn is backed by investors such as Bessemer and New Vernon.
The single largest shareholder (94.7%) of Orient Global is a Singapore based firm Orient Green Power Pte which is a three way joint venture between Shriram EPC, Bessemer and Olympus Capital. The remaining shares are owned by the three partners.