Nalanda Capital has acquired 2.2% stake in Kochi-based power systems maker V-Guard through open market purchases for about Rs 11.5 crore($2.5 million). V-Guard was one of the first IPOs to go through soon after the market crash in January 2008 at a time when various issues were postponed or had to be rolled back for lack of investor interest.
V-Guard’s stabiliser unit is its prime revenue generator. Although it has a national presence, majority of its revenues comes from South. The company has a strong presence in the Kerala consumer market.
It was started 30 years back for making stabilisers used for balancing electrical voltage fluctuations. Today it is into various products including pumps, cables, water-heaters, UPS systems and electric fans, some of which are manufactured by the firm and some are sourced from other vendors.
Given Nalanda’s strategy of buying over 5% stake in many of its recent portfolio picks it may buy more shares of V-Guard too. V-Guard scrip rose 6.78% to close at 180.3 at NSE on Friday, 3.4% more than the price at which Nalanda bought its shares.
Nalanda Capital, a $400-million fund headed by former Warburg Pincus India MD Pulak Prasad, has been one of the most active PE investors picking small minority stakes in Indian listed companies. It has bought shares of a lot of companies when valuations had shrunk significantly after the market crash and has been active in picking shares over the past three months when the benchmark indices have corrected almost 10% from its recent highs.
Nalanda Capital had last month hiked its holding in steel tubes and pipes maker Ratnamani Metals beyond 5%. The Singapore-based firm, has been slowly building its exposure in Ratnamani since early last year. Nalanda Capital had also recently increased its holding in power transformer maker Voltamp Transformers Ltd to 8.75% through market purchase of shares since mid-October for Rs 26 crore ($5.8 million). It also bought more shares of mid-sized IT services firm MindTree to raise stake to 8.4%.
Nalanda had also acquired 1.4% stake in Ahluwalia Contracts (India) Ltd for Rs 12.3 crore ($2.7 million), its first real estate-cum-construction sector exposure.
Nalanda, that has investments in Berger Paints, Carborundum Universal, Kewal Kiran Clothing Ltd, Kirloskar Oil Engines, Mastek, Page Industries, Vaibhav Gems, Triveni Engineering and WNS, had early last year exited Chennai-based broadcaster Sun TV Network Ltd with 2.5x returns on its 14-month-old investment in Kalanithi Maran-owned Sun TV. It also part exited its investment with a multibagger from Kirloskar Oil Engines with an estimated return of around 4x in less than two years.