JM Financial India Fund has made an exit from its investment in LIC Housing Finance, a mortgage lender. The fund had picked up a small minority stake in February this year for around Rs 30 crore from the open markets. This will be the second exit for the private equity fund. Its first exit was Genesis Colors last year, and the fund has managed to make about 2.5x on both the deals.
The Mumbai-based investment bank, which is founded by Nimesh Kampani, declared its first quarter results yesterday reporting an income of Rs 145 crore. The net profits after tax were at Rs 31.2 crore for the quarter.
JM Financial manages a $225 million private equity, which is co-sponsored Old Lane Partners, a hedge fund run by Vikram Pandit which was acquired by Citigroup. JM Financial joins a number of private equity funds who have picked up stake in listed Indian companies through secondary market purchases like ChrysCapital, Sequoia Capital India, SAIF Partners, Norwest Venture Partners, among others.
“Our approach was to look at some securities from a long term perspective,” said Harinder Sawhney, an Executive Director with JM Financial Investment Manager Ltd. But since the stock hit the target level due to strong market recovery post-election in May this year, the fund decided to sell its stake. The firm has not made any other investments through secondary market purchases.
In its results release, JM Financial also said that it has reinvested in two of its portfolio companies. Sawhney refused to divulge the names of these companies. Spandana Microfinance, one of the portfolio firms of the fund, was earlier reported to be raising a Rs 300 crore round.
JM Financial has till now invested around 50% of its fund across seven investments. Some of its other investments include Samson Maritime Ltd, an offshore logistics and support services provider; International Tractors, a farm-equipment manufacturer; Sona Group, an auto components co. and Pre-Media Global, a KPO.