Media house Bennett, Coleman & Company Ltd, that invests through ad-for-equity route, has once again pressed the part exit button from jewellery retailer Gitanjali Gems. The firm sold almost a third of its remaining holding with a haircut of 60% on Tuesday, as per VCCircle estimates.
BCCL had put in Rs 60 crore as a pre-IPO investor in September 2005 and had as much as 4.76% in Gitanjali Gems before the IPO in 2006 that dropped to a little over 3% post issue. It had acquired the stake at a price of Rs 300 per share.
It sold a small chunk of shares (around 1% of its holding) in June-September quarter in 2007 when the price was hovering around Rs 300 per share so the investor could have made the partial exit at par value within two years of investment.
It again sold around a quarter of its holding in the October-December quarter that year when the markets were peaking out apparently at a valuation of around Rs 400 per share or with 33% returns on its cost of purchase. These two part exits would have fetched the firm around Rs 15 crore against the principal of around Rs 12 crore.
It has been holding on to its remaining 1.6 million shares for the last two and half years and sold half a million shares at a price of Rs 123.02 on Tuesday or at a discount of around 60% to the cost price. In all, BCCL has encashed around Rs 21 crore and its remaining stake is valued at Rs 13.8 crore.
This is not the first investment in the retail/jewellery space that has brought losses for BCCL. It had earlier made part exits at a loss with gold jewellery maker and retailer Rajesh Exports.