Singapore-based private equity firm Nalanda Capital has increased its stake to over 5 per cent in the media firm DB Corp, the publisher of the Hindi daily Dainik Bhaskar. According to a disclosure, Nalanda now holds 5.05 per cent stake in DB Corp.
According to VCCircle estimates, the stake has been acquired for Rs 175-200 crore.
Shares of DB Corp were trading at Rs 196 a unit, up 0.41 per cent on Tuesday at 1:32 pm. This gives the company a market cap of nearly Rs 3,600 crore.
DB Corp’s Q1 FY13 were below estimates, with its sales up 6.6 per cent to Rs 380 crore and profit after tax down 15 per cent to Rs 52 crore. Net sales went up 15.7 per cent to Rs 1,464 crore with profit after tax falling 22 per cent to Rs 202 crore in FY12.
“Weak ad revenue growth and decline in national ad growth clearly indicate that the macroeconomic scenario is not favourable and challenges would persist in near term. Nevertheless, we believe the long-term story is intact, given DB Corp’s leadership position in key markets. DB Corp’s leadership position in key markets would drive strong ad revenues once the macroeconomic environment improves,” an Emkay Global report said regarding the firm.
In 2006, DB Corp had raised Rs 150 crore from Warburg Pincus and the latter bagged Rs 273 crore when it exited last year after a part sale of shares during the company’s IPO in 2009.
Interestingly, Nalanda Capital has been founded by former Warburg Pincus India managing director Pulak Prasad. This will be Nalanda’s third investment in a company backed by Warburg. Earlier, it had invested in gem and jewellery exporter Vaibhav Gems and business process outsourcing services firm WNS Global.
(Edited by Sanghamitra Mandal)