Sequoia, India Value Fund & Baring India Back TD Power IPO

09 September, 2011

Power equipment maker TD Power Systems listed on the bourses today and was trading up over 15 per cent on its debut. The Bangalore-based company raised Rs 227 crore from its maiden offering, but 40 per cent of the issue had been subscribed by private equity firms.

TD Power was trading at Rs 295.35 on the BSE at 1:21 pm on Thursday, up over 15.37 per cent. The company has reached an intra-day high of Rs 308, 20 per cent premium to its issue price of Rs 256, after slipping marginally in the morning trade to Rs 242. The share price of TD Power closed at Rs 274.8, up by 7.34 per cent.

Sequoia Capital India, through its two entities, has invested Rs 38 crore-Rs 39 crore in the company and owns over 4.5 per cent stake. India Value Fund Advisors’ India Value Fund IV holds 3.67 per cent stake for Rs 32 crore while Baring India Pvt Equity Fund III Listed owns 2.34 per cent stake for Rs 20 crore. Baring and Sequoia had also come in as the anchor investors in the issue.

The IPO of TD Power Systems was subscribed 2.92 times last month, mainly by qualified institutional buyers (QIB), who subscribed 6.52 times while the non-institutional investor and retail individual investor categories subscribed 0.38 times each. Other investors included IDFC Premier Equity Fund and Smallcap World Fund, Inc. and American Fund Insurance Series Global Small Capitalisation Fund.

TD Power has reported 31.3 per cent compound annual growth rate (CAGR) in total income to Rs 863.7 crore for FY11, with profit after tax growing 14.2 per cent to Rs 56.7 crore.

TD Power Systems manufacturers AC generators (with output capacity in the range of 1 MW-52 MW) for prime movers, such as steam turbine generators and horizontal hydro generators. It also executes turbine generator island projects for steam turbine power plants, with output capacity up to 52 MW, using a Japanese turbine combined with its own generator.

Through its subsidiary DF Power Systems, TD Power is also in the business of EPC, executing boiler-turbine generator (BTG) island projects and the balance of plant (BOP) portion for steam turbine power plants, with output capacity between 52 MW and 150 MW. Its current order book stands at Rs 1,094.69 crore.

The funds raised from the IPO will be used by TD Power for expansion of its manufacturing plant (Rs 94.6 crore), construction of project office in Bangalore (Rs 28.9 crore), debt repayment (Rs 30.2 crore), meeting working capital requirements and other general corporate purposes.

Enam Securities is the global co-ordinator while Antique Capital Markets and Equirus Capital are the book running lead managers to the issue.


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Sequoia, India Value Fund & Baring India Back TD Power IPO

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