Ace stock market investor Rakesh Jhunjhunwala is expected to make a windfall in his four year old investment in engineering, procurement and construction firm A2Z Maintenance & Engineering Services Ltd. Jhunjhunwala along with Beacon and few other promoter group individuals are selling part of their shares in the IPO.
Although valuations of the shares are yet to be fimed up, the company is eyeing to raise around Rs 750 crore just through fresh issue of shares. Assuming 25% odd stake dilution the valuation of the firm could be around Rs 3,000 crore.
Jhunjhunwala invested around Rs 21 crore and holds 21% stake. He invested with the company’s valuation at just about Rs 100 crore which means he could be eyeing almost 30x returns in the four year old investment. Beacon invested around Rs 87 crore three years ago and owns 12% pre issue.
A2Z had revenues of Rs 1,225 crore with net profit of Rs 98 crore for the year ended March’10. The firm plans to use the money raised through the issue for investment in three biomass (bagasse)-based power cogeneration projects of 15 MW each in Punjab besides investment in five biomass-based power generation projects of 15 MW each in the Rajasthan, repayment of a loan granted by L&T Infrastructure Finance besides working capital requirements.
The company is into EPC services for the power transmission and distribution sector with a focus primarily on the distribution segment. It is diversifying the business to provide EPC services to power generation companies and companies in other sectors, including road and telecommunications.
The issue is being managed by as many as five BRLMs including IDFC, BofA Merrill Lynch, Enam, ICICI Sec and SBI Caps. Yes Bank is the Co-BRLM to the issue.