Three private equity-backed firms listed with modest or no gains and are, in early hours, trading at a discount to the issue price, indicating how volatile the primary market is at present. The poor listings appear to be closely tracking the movement of benchmark 30-stock index Sensex that has been witnessing profit booking over the last two days and thereby unable to scale up the last 2-3% mark that will take it to the all time peak level last seen in January 2008.
IL&FS Private Equity and Sabre Capital-backed Ramky Infra opened with 4.6% gain to its issue price of Rs 450 but has tanked over 10% in early morning trade, partly recovering after crashing as much as 22%. The company ultimately closed at a disount of 13.92% to its listing price at Rs 387.35.
IL&FS PE that made part exit with 2.6x returns on its four-year-old investment(through Tara Fund) as well as Sabre Capital (that invested through Sabre Abraaj Fund I) are still sitting on substantial gains as their average cost of purchase of shares is pegged at Rs 180 per share.
Sabre Capital and IL&FS PE had together invested around Rs 125 crore of which three-fifths was invested by Sabre Capital in December’06.
IFC is another minority investor owning 0.8% stake before public issue.
At the current market price, the company is valued at around Rs 2,294 crore ($515 million). Ramky Infra is into two businesses: construction and infrastructure development & management. It has constructed and developed projects in sectors, such as water and waste water, transportation, irrigation, industrial parks (including SEZs), power transmission and distribution, residential, commercial and retail property developments and a transport terminal development.
ORIENT GREEN POWER COMPANY
The scrip listed 3% below its issue price of Rs 47 and in early morning trade is quoting 4.5% down the issue price. At this price the company has a market cap of Rs 2,100 crore ($470 million). The company share prices closed at Rs 44.9, down by 4.47%.
Bessemer Venture Capital and Olympus Capital-backed renewable energy firm Orient Green Power Company had raised Rs 900 crore through the public float.
The money is to be used for funding expansion of multiple biomass power projects besides funding subsidiaries for wind power and biomass power generation and repayment of debt worth about Rs 150 crore.
Both Bessemer and Olympus are invested in the company through direct and indirect route. The principal backer of Orient Green is Shriram EPC which in turn is backed by investors such as Bessemer and New Vernon.
The single largest shareholder (56%) of Orient Global is a Singapore based firm Orient Green Power Pte which is a three way joint venture between Shriram EPC, Bessemer and Olympus Capital.
IL&FS and IFCI-backed Electrosteel Steel opened with a modest 1.4% gain to its issue price of Rs 11 and in early hours is quoting 2.2% below issue price. The company that raised Rs 400 crore through the public float had priced its issue at the same level it allotted shares to all investors over the last one year. But the share price of the company recovered and it closed at a premium of 2.27%.
The company is promoted by Electrosteel Castings which owns 34% post issue. Other large investor in the company is international steel firm Stemcor.
At the price band Electrosteel Integrated is eyeing a market cap of around Rs 2,177 crore which is more than that of Electrosteel Castings (Rs 1,474 crore). Over half of the money raised through the public float is to part finance the construction of an integrated steel and D.I. pipe plant having a capacity of 2.2 MTPA in the state of Jharkhand. Some of the money (Rs 22 crore) will also be used as margin money towards bank guarantees besides other purposes.
Among the key investors, IFCI has invested Rs 100 crore and IL&FS and its managed funds have together invested more than Rs 100 crore.