Credit Suisse PE Asia and BCCL-backed Shree Ganesh Jewellery House tanked after listing 0.5% below issue price. The company is trading at Rs 173 in early morning trade or 33% lower than the issue price of Rs 260. Axis Bank, ICICI Securities and Avendus Capital were the book running lead managers to the issue.
At the current price, the private equity investors are sitting on notional gains of 15% on their less than three year old investment.
Credit Suisse had invested Rs 80 crore through convertible debentures in March’08 and its cost of purchase is estimated at Rs 150 apiece, the same as media house BCCL, that invests through ad-for-equity deals. BCCL had put in Rs 5 crore through convertible debentures in June’07.
Credit Suisse PE had partly exited in the IPO of the company, a Kolkata-based jewellery house and an exporter of hand-crafted gold jewellery. It netted around Rs 55 crore by selling a part of its shares with a 73% return on its two- year-old investment. Credit Suisse held 10.99% stake that has dropped to 5.27% post issue. BCCL holdings has decline from 0.69% to 0.55% post issue.
Shree Ganesh raised funds to expand manufacturing and retail operations besides diversifying into newer products and geographies.
The company had roped in IFCI, India Max Investment Fund and Bank Muscat India Fund as anchor investors at the lower end of the issue price band of Rs 260-270.
For the year ended March’09, the company almost doubled its revenues to over Rs 2,800 crore with net profit of Rs 133 crore. At the lower end of the price band, the company would have command a valuation of Rs 1,575 crore (~$345 million). But now its market cap stands at Rs 1,054 crore.
See our earlier report here.