SAIF Partners picks small stake in auto component maker Fiem

Venture and growth equity investor SAIF Partners has picked 1.1 per cent stake in public listed automotive lighting & signalling equipments and rear view mirror maker Fiem Industries Ltd through an open market transaction on Monday.

It bought the stake from a public individual investor for around Rs 11.3 crore ($1.7 million), bulk deals data shows.

SAIF that has been investing in the country for over a decade and prides itself for having taken a bunch of private firms to the public market, has built a fairly active public equities portfolio in the past. It had particularly deployed a lot of capital soon after the Indian stock markets crashed after hitting a peak in the last bull run that ended in January 2008.

Even as it kept sealing a one-off deal in the public market space, it has been focusing more on venture investments for the last couple of years.

However, it did make a PIPE (private investment in public enterprise in industry parlance) last year when it picked 10 per cent stake in KDDL, a maker of watch components and the parent of luxury watch retailer Ethos.

Some of its marquee investments include Just Dial and MakeMyTrip, firms that it backed before they went public.

Fiem Industries, among the first company in India to introduce LED lights in two wheelers, clocked revenues of Rs 825 crore with net profit of Rs 42.4 crore for the year ended March 31, 2015.

It set up a new manufacturing facility in Gujarat for manufacturing automotive lighting and plastic parts that went into commercial production early this year. It is also expanding its capacity in Tapukara plant (Rajasthan) for manufacturing of LED lighting products.

According to March 22 report by broking firm CD Equisearch, Fiem has outperformed the two wheeler industry in terms of revenue growth in the first nine months of the current financial year backed by the strong volume growth of its key clients- Honda Motorcycle and Scooter India and TVS Motors, contributing about 70 per cent of the company’s revenue.

CD Equisearch has an accumulate rating on the stock with a target price of Rs 895 per share. Fiem scrip declined 1.96 per cent to end at Rs 811.25 a share on BSE in a weak Mumbai market on Monday.

The two wheeler market has seen a slowdown as rural demand shrank in the wake of two succsesive years of poor monsoon that feeds the agricultural sector. Investors are betting on revival in demand for two-wheelers, especially motorcycles, this year on.

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