Nalanda Capital, a Singapore-based private equity firm founded by former Warburg Pincus India MD Pulak Prasad, has increased its holding in Ratnamani Metals and Tubes Ltd to 10.47 per cent, according to a company disclosure to Bombay Stock Exchange.

The private equity firm acquired 0.59 per cent additional stake for an estimated Rs 2.5 crore.

According to the disclosure, Nalanda Capital already held 9.65 per cent stake as on September 30, 2011. It boosted its holding marginally in the past three months to 9.88 per cent and bought afresh to take the total holding to 10.47 per cent.

At 1:38 pm, shares of Ratnamani Metals were trading at Rs 100 on the BSE, unchanged from the previous close. However, the share price has moved up over 10 per cent in the past one week.

Nalanda Capital, which invests in listed Indian companies, has been building its exposure to the steel tubes and pipes maker Ratnamani since early 2010. Its holding crossed 1 per cent in the quarter ended June 2010 and it had been slowly increasing its exposure in the firm ever since.

Ratnamani, which grew its business size tenfold between 2003 and 2008, had seen its financials affected by the momentary slowdown that impacted India Inc and especially the petrochemical industry over the past two years. For the year ended March 2010, the firm had revenues of Rs 852 crore, with a net profit of Rs 81 crore. While the firm’s net margins has improved, revenue growth has been a problem over the past two financial years.

Founded in September 1983, Ratnamani Metals provides piping solutions to a diverse range of industries. The firm manufactures high frequency welded & submerged arc welded (SAW) carbon steel pipes, seamless tubes & pipes, welded tubes & pipes and electric fusion welded stainless steel pipes. The company has manufacturing plants at Mehsana (Gandhinagar) and Kutch district of Gujarat.

For Nalanda Capital, this appears to be yet another move to buy more of chosen portfolio firms. Last week, Nalanda bought an additional 0.16 per cent in Great Eastern Shipping Company. The PE firm had been building stake in Great Eastern Shipping for the past six months. It had apparently acquired 2.14 per cent stake in the shipping firm during July-September quarter and hiked it to 4.95 per cent by December 31, 2011.

Nalanda Capital, which has $875 million under management across two funds, appears to be looking to bring down the average cost of share acquisition in the Indian shipping company as stock market valuations have tanked to near two-year low.

In November 2011, Nalanda Capital had increased its holding in AIA Engineering Ltd (which manufactures and designs engineering components) to 6.3 per cent. The PE firm acquired the additional 1.2 million shares or 1.27 per cent stake for a total consideration of Rs 37.2 crore.

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