Singapore-based Nalanda Capital has picked up a 2.36% stake in outsourcing product development firm Aztecsoft Ltd on Thursday. Nalanda India Fund picked up the stake for Rs 3.8 crore from ICICI Prudential Life Insurance on the Bombay Stock Exchange through bulk deal route. The deal is interesting as Nalanda picked up a stake in MindTree Ltd earlier this month.
MindTree acquired Aztecsoft last year for around Rs 400 crore in one of the biggest deals in domestic IT space. MindTree holds an 80% stake Aztecsoft, while rest is held by trusts and public shareholders. Nalanda bought nearly a 2% stake in MindTree for Rs 15.6 crore from venture capital firm Walden International on February 3. Going by Nalanda’s previous investments, the firm is likely to pick up more stake in these two firms.
The pattern followed by Nalanda Capital is similar to that by Ashish Dhawan’s ChrysCapital. The Delhi-based fund has picked up stakes in Arvind Dham promoted Amtek India, Amtek Auto and Ahmednagar Forgings. Amtek Auto is merging the with Ahmednagar, Amtek India and three other entities with itself. ChrysCapital is likely to hold about 8-9% stake in the merged entity.
MindTree had completed the open offer for Aztecsoft in July 2008 at the acquisition price of Rs 80 per share. Nalanda Capital has picked up the stake at share price of Rs 35.24.
The stake buy in MindTree comes at a time when many small and mid-sized IT companies are facing risk of greater pricing pressures due to client concentrations. MindTree has one of the least client concentration in mid-sized space as its top 5 clients account for 29% revenues and top 10 account for nearly 44% revenues.
Nalanda Capital has a $400 million fund with a mandate to invest in listed Indian companies only. The fund is headed by Pulak Prasad, who was managing director with Warburg Pincus in India earlier, and went on to set up his own fund couple of years ago. In December, Nalanda had picked up a stake in Kalanidhi Maran’s Sun TV Network Ltd for a little more than Rs 100 crore. It has picked up stakes in more than half a dozen listed companies such as Mastek, Triveni Engineering, Page Industries etc.