Sequoia Capital Buys Into StanChart PE-backed PI Industries

19 August, 2011

Sequoia Capital India has picked up 1.82 per cent stake in PI Industries Ltd, an agri-input and custom synthesis firm backed by Standard Chartered Private Equity’s mid-market team. The venture and growth capital investor has bought the stake from the market for Rs 24.2 crore, through its investment.

The shares were bought on the Bombay Stock Exchange on Wednesday for Rs 528.85 a piece, a discount to its closing price of Rs 541.95 on that day. The stake was picked up from Rowanhill Investments, who has been selling shares over the past few months.

When contacted, a Sequoia Capital India spokesperson declined to comment on the development.

The share price of the firm closed at Rs 541, marginally down 0.18 per cent as against the BSE, which fell over 2.2 per cent on Thursday. One source said that the current round of secondary share sale attracted high interest from several suitors, including private equity and mutual funds.

Standard Chartered Private Equity, which invested Rs 50 crore through preference shares and optionally convertible debenture in 2009, currently holds 14.85 per cent stake in the firm. As per Thursday’s closing market capitalisation, this stake is worth over Rs 200 crore. At the current share price, Standard Chartered PE’s mid-market team is looking at an exit multiple of over 4-4.5x on its less than two year old investment.

Former Arthur Andersen and KPMG Consulting India head Narayan Seshadri, who also sits on the PI Industries board, holds 1.05 per cent stake in the firm. Standard Chartered PE’s India mid-market team head Rahul Raisurana also sits on the board besides Raj Kaul, former M&A head for Bayer AG.

PI Industries reported 32.7 per cent increase in net revenue to Rs 718.57 crore, with net profit rising 56.6 per cent to Rs 64.1 crore in FY11. For the latest June quarter, the firm reported 59 per cent increase in net revenue to Rs 206 crore.

PI Industries, which has over 1,100 employees, currently operates three formulation and two manufacturing facilities, as well as four multi-product plants under its three business units across Jammu and Gujarat.

Earlier this year, the company divested its engineering plastics business to French multinational Rhodia SA, a €4 billion ($5.26 billion) specialty chemicals major. The deal was part of its corporate restructuring exercise, as the company consolidated its position in its core activities of agrochemical and fine chemical businesses.

Sale of this unit and conversion of debentures by Standard Chartered PE during the quarter helped the firm reduce its debt burden from Rs 248.4 crore to Rs 133.1 crore.


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Sequoia Capital Buys Into StanChart PE-backed PI Industries

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