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Private Equity Funds Press Exit Button As Markets Hit New Highs

20 May, 2009

As Indian stock markets hit new highs, private equity funds seem to be pressing the exit button. Yesterday, when market turnover reached a historic high of Rs 1.5 trillion, India’s private equity majors ChrysCapital, Standard Chartered Private Equity (SCPE) and IL&FS Investment Managers offloaded stakes in their listed portfolio companies.

Indian stock markets have been on a rally with Sensex rising from 8,160 points on March 9 to 14,302.03 points yesterday. The rally has got an adrenalin shot with a strong pro-reform government coming to power in New Delhi in the recently held general elections.

Markets on Tuesday also witnessed several hedge funds buying stocks actively as number of trades executed on the National Stock Exchange outstripped even those at New York Stock Exchange. Active buyers included Indea Capital, Batterymarch Financial Management, Heritage Capital, etc.

Leading the pack, ChrysCapital has sold a 5% stake Chennai-based vehicle financier Shriram Transport Finance for Rs 300 crore.

SCPE Makes Quick Buck From Karur Vysya

The banks’ private equity arm seems to have made a quick buck from its investment in Karur Vysya Bank. SCPE has sold a little more than 2%, around half of its 4.42% stake, for Rs 31.6 crore. The stake has been sold at a share price of Rs 265 in a bulk deal on Bombay Stock Exchange. SCPE picked up a 4.42% stake in the bank in February for an aggregate sum of Rs 47.43 crore, entering at a share price of Rs 198.

The private equity firm has also bought less than 1% stake in Indian Overseas Bank. It has also recently invested in Man Infraconstructions, ABG Shipyard and Mahindra & Mahindra Financial Services.

IL&FS Makes Further Exit from IBN18 Broadcast

Leverage India Fund, managed by IL&FS Investment Managers Ltd (IIML), has shed more of its holding in IBN18 Broadcast, which operates general news channels CNN-IBN and IBN7. The fund has sold around a 2.2% stake for more than Rs 40 crore in the company. Last month IBN18 has disclosed that Leverage India Fund has sold a little more than 2% stake in the firm for Rs 35.8 crore between September 2008 and April 2009. After Tuesday’s stake sale, the PE fund holds less than 2% stake in the firm. 

The open market exits yesterday are part of ongoing trend since March. Several PE funds have shed their stake in firms since the rally began. Besides IBN18, IIML has also made part exits from exited ABG Shipyard. Then IDFC Private Equity has completely exited gas distribution firm Gujarat State Petronet, while 3i Group sold most of its stake in Mundra Port and Special Economic Zone Ltd. Others who have made an exit are Citigroup Venture Capital International and 2i Capital. 

 


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Private Equity Funds Press Exit Button As Markets Hit New Highs

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