Leverage India Fund has made a part exit from private sector ship builder ABG Shipyard Ltd. The private equity fund, managed by IL&FS Investment Managers Ltd (IIML), has sold 0.5% stake on National Stock Exchange for Rs 3.86 crore on Friday. On the other hand, Standard Chartered Private Equity has upped its stake over the last year in the firm.
Leverage India Fund sold half of its original 5.32% stake in the firm in the period between July to December to 2007. The shares were trading between Rs 440 to Rs 990 during that period. This would mean an exit of between 4x to 8x, as the private equity fund had invested at Rs 113 per share in 2005. On Friday’s deal, Leverage India Fund sold the stake for Rs 151 per share.
ABG Shipyard also raised private equity funds from New York Life Investment Management India Ltd (NYLIM) and Merlion India Fund in 2005. Merlion Fund is a joint venture between Temasek and Standard Chartered Private Equity, and has a corpus of $100 million. NYLIM had already completely exited its investment by June 2007.
This is not the first company in which India Leverage Fund sold a stake in recent months. It has also sold a little more than 2% stake in IBN18 Broadcast, which operates general news channels CNN-IBN and IBN7. The stake was sold for Rs 35.8 crore between September 2008 and April 2009.
Standard Chartered Private Equity (SCPE) has increased its stake in ABG Shipyard from 1.3% in June 2008 to 5.41% by March 2009. It had bought initial part of the stake from open markets in 2006 end for a share price of Rs 217. SCPE has also picked up stakes in Karur Vysya Bank Ltd and Indian Overseas Bank in February from open markets, besides averaging its investment in Mahindra & Mahindra Financial Services.