Nalanda Capital has raised its holding in plastic products maker Supreme Industries to over 5% since January 1. This was in line with the $400-million private equity fund’s strategy of picking over 5% stake in many of its recent portfolio firms.

The fund, headed by former Warburg Pincus India MD Pulak Prasad that has been one of the most active PE investors picking small minority stakes in Indian listed companies over the past three years, has been building its exposure in Supreme Industries since mid-2010. It acquired 3.14% in the April-June quarter last year when share price of the company was around Rs 500-550.

It raised its holding marginally in the following quarter when the share traded between Rs 550-750 and as of December 31, 2010 held 3.35% stake. The fund has acquired fresh shares worth around Rs 30 crore since early this year. Nalanda would have shelled out around Rs 75-80 crore in total for its investments in Supreme Industries that is worth Rs 97 crore currently, according to VCCircle estimates.

Last month, Nalanda had picked on Kochi-based power systems maker V-Guard as a new portfolio firm buying 2.2% stake through open market purchases for about Rs 11.5 crore ($2.5 million). Nalanda Capital had, in December, hiked its holding in steel tubes and pipes maker Ratnamani Metals beyond 5%, after having slowly built its exposure since early last year. It 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 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 Capital had previously bought shares of a lot of companies when valuations had shrunk significantly after the market crash in 2008 and is sitting on reasonable returns on them. It has been active in picking shares over the past four months when the benchmark indices have corrected almost 15% from its recent highs and appear to be betting on cashing in on a similar value buying opportunity.

Leave Your Comment(s)