Merlion India Fund, a joint venture between Standard Chartered Private Equity and Temasek, has sold half of its remaining 1.67 per cent stake in ABG Shipyard for Rs 13.6 crore ($3 million) to the promoters of the company.

It now looks all set to fully exit from its over five-year-old investment in the firm.

Merlion had earlier sold a part of its pre-IPO investment in the shipping firm for Rs 124.5 crore ($27.6 million) last December.

Interestingly, Merlion had bought some more shares soon after selling in December, thereby raising its holding from 1.62 per cent as of December 31, 2010, to 1.67 per cent as of March, 31, 2011, according to its stock holding disclosures.

The fund house had co-invested, along with IL&FS Private Equity (Leverage India Fund) and Standard Chartered PE, in July, 2005, months before the public float of ABG Shipyard. The shares were picked through a mix of fresh issue and purchase from the promoters at Rs 113 a piece.

It sold shares at Rs 340.41 a piece on June 24 or effectively generated around 3x returns on its various rounds of part sell-off.

Merlion held as much as 18.3 per cent stake pre-IPO, which diluted to 15.2 per cent post-IPO. It had earlier sold shares in 2007 when the share price was hovering around Rs 350-Rs 400 per scrip and had been holding on its stake ever since, only to start selling in December.

IL&FS PE apparently exited ABG Shipyard Ltd a few months ago. Two years back, Standard Chartered Private Equity had increased its stake in ABG Shipyard from 1.3 per cent in June, 2008 to 5.41 per cent by March, 2009. It had bought initial part of the stake from open markets in 2006-end for a share price of Rs 217. Standard Chartered PE continues to hold the stake.

ABG Shipyard also raised funds from New York Life Investment Management India Ltd that exited its investment by June, 2007.

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