Singapore-based Nalanda India Fund is picking an additional 2.2% stake in Berger Paints to hike its existing holding to around 5.8%. Although the price at which Nalanda would subscribe to the fresh shares is not clear, at current market price it would have to shell out around Rs 34.5 crore.

As of June 30, Nalanda held 3.7% in Berger Paints. According to a disclosure made to the stock exchange Berger Paints will issue up to 7.2 million equity shares of a face value of Rs 2 each at a price not lower than the minimum price specified as per Sebi guidelines for preferential issue.

The relevant date for determining the issue price shall be August 17, 2009. cKolkata-based Berger Paints is a Rs 1,500 crore firm making it the second largest paint company in the country by revenues behind Asian Paints.

Nalanda Fund which 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 has been pretty active in the stock market. It had been picking small stakes in small and mid-sized Indian listed companies over the last few months through open market transactions.

Given that a number of transactions were sealed post September’08 when Lehman Bros bankruptcy led to crash in stock markets, it should be sitting on a good return in its portfolio companies or would have averaged out high priced buys in the past. Some of its investments during the period include Triveni Engineering & Industries, Kirloskar Engines, Mastek, Sun TV, Carborundum Universal, MindTree, Aztecsoft and Page Industries.

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