SAIF Partners, a mid-market, Asia-focused private equity firm, has been slowly and steadily reaping the gains from its India portfolio. The $3.5 billion Asian PE firm has now completely exited its two-and-a-half-year-old investment in lighting & electrical products maker Havells India. The investment has yielded 3.15 times return in over two years weighted average, said the private equity firm.

This comes in the wake of BSE Sensex continuing its upmove, despite the not-so-optimistic macro data flowing out of the Indian economy.

SAIF has been consistently selling its stake in small chunks. Only two weeks ago, the PE firm sold almost half of its remaining 2.7 per cent stake in Warburg Pincus-backed Havells with over 3x returns.

SAIF started investing in Havells in the second half of 2008 when the stock market valuations were close to bottoming out. It could have invested around Rs 80 crore ($17 million) in the Noida-headquartered company through open market purchases to garner around 4.9 per cent by March, 2009, when the markets hit the lowest level in years.

The PE firm started pulling out one-and-a-half years later by selling some shares in the July-September quarter of 2010 when share price of Havells hit a high of Rs 840 a piece, almost 3.5x the estimated average cost of purchase for SAIF.

In the following quarter, SAIF sold almost a quarter of its holding post a bonus issue and could have pocketed around Rs 53 crore, thereby taking out the original investment cost. It again sold some shares worth around Rs 6 crore in the January-March quarter of this year and encashed Rs 62.2 crore in the last round of share sale two weeks ago. It could have pocketed somewhere around Rs 80 crore in the final chunk of share sale.

Havells had acquired Sylvania four years ago, catapulting it at one shot, as the world’s fourth largest manufacturer of lighting products faced grim prospects since its key European business had to bear the brunt of the economic slowdown in 2008. However, the firm undertook a massive restructuring in the following year and recently turned around its overseas operations.

Last month, SAIF had invested $4 million in the first round of funding for Pune-based BrainBees Solutions Pvt Ltd, which runs the online baby products shop Also, a number of its portfolio firms are in the process of going public. These include restaurant chains operator Speciality Restaurants, Mumbai-based local search firm Just Dial Pvt Ltd and mobile VAS firm One97 Communications. One of its portfolio firms, the country’s leading online travel company MakeMyTrip Ltd, had also listed on NASDAQ last year.

Leave Your Comment(s)