Och Ziff-advised fund AMIF I appears to be on its way out of its three-year-old investment made before the public issue of Future Capital. The fund sold as much as three fourths of its remaining holding of 6.37% this week in the open market with an estimated 10% haircut.
AMIF I had invested in June 2007 (when markets were headed towards their peaks) and Future Capital was one of the few large issues going through after the markets crashed in January’08. It had invested around Rs 98 crore (~$20 million) at Rs 178 a piece to pick 9.68% stake that got diluted to 8.7% post issue.
AMIF I had apparently sold some 10% of its shares soon after the issue and held around 4.9 million shares as of March’08. The stock was listed with around 41% premium to its issue price of Rs 765 and AMIF would have encashed this small chunk with around 4x net returns in less than one year.
But the story changed dramatically after the markets crashed further. It held on to its stake only to start partial exits from the October-December’09 period when it sold 0.34 million shares when prices were ruling around Rs 200-285 or up to 50% premium to what AMIF had purchased the shares for. It sold another half a million shares in the January-March quarter this year when prices hovered between Rs 170 and Rs 235.
As per VCCircle estimates, AMIF would have netted Rs 105 crore by selling around 80% of its total initial purchase with around 25% net returns. Its remaining shares are valued at Rs 17 crore.
Incidentally, another veteran investor and academician Shivanand Mankekar had also pressed the exit button few months back. Mankekars had picked shares at Rs 117.5 apiece in June 2006. Laxmi and Shivanand Mankekar had invested around Rs 24 crore in Future Capital months after it was founded. They stayed invested till September’09 and Shivanand sold his 1.48% stake in Oct-Dec’09 with an estimated 1-1.5X net returns for a little over three year old investment.
However Laxmi Mankekar continues to hold around 1.7% stake in the company and has not sold any shares after the issue, till date. He is sitting with unrealised gains of around 38% on a four-year-old investment.
Incidentally, the co-promoters of Future Capital Kishore Biyani and Sameer Sain have decided to part ways and Sain has also been selling his shares in the financial services company gradually.