Motilal Oswal PE raises stake in SME lender Intec Capital to over 32%

Motilal Oswal Private Equity has increased its equity stake in the Delhi-based non-banking financial institution Intec Capital to over 32 per cent after completing the open offer and fresh allotment of equity shares. The PE firm is estimated to have put in around Rs 65 crore in total in tranches in the public listed company, as per VCCircle estimates.

In March last year, Motilal Oswal PE had invested around Rs 37.3 crore through a combination of compulsorily convertible preference shares (CCPS) and equity shares. This was through two entities India Business Excellence Fund-II and India Business Excellence Fund-II A. It originally picked around 5 per cent stake.

As part of a larger transaction it had joined hands with the promoters of Intec Capital to come with an open offer as a person acting in concert. The PE firm is now a co-promoter of Intec Capital.

In the meantime, it picked more shares through a fresh allotment worth Rs 17.7 crore while also converting the CCPS into shares. It bought additional shares in the open offer worth Rs 10 crore taking its holding up to a little over 32 per cent. As per shareholding disclosures it also owns around 4 per cent more, where the shares are held in the escrow account for the last one year. The genesis of these shares in the escrow could not be immediately traced

Intec Capital is involved in lending to small and medium enterprises across the country. The company was set up by Sanjeev Goel back in 1994. Goel, a chartered accountant with a master’s degree in International Finance from the University of Iowa, had set up a computer hardware and software distribution firm before starting Intec Capital.

The company focuses on machinery financing requirements of SMEs in sectors like auto & engineering, printing & packaging, plastic & injection moulding, medical, healthcare & pharmaceuticals and food processing. It works closely with more than 75 machinery vendors, one of the main avenues for the company to source business.

For Motilal Oswal PE, this came as yet another bet on NBFC space after it invested in AU Financiers and has part exited with a multi-bagger. Motilal Oswal PE, which had put in Rs 40 crore across two rounds of investment in 2008 and 2010 in Intec Capital, is estimated to have encashed around Rs 150 crore from two rounds of partial exits over 2012-13.

(Edited by Joby Puthuparampil Johnson)

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