With the maiden offer market making a comeback of sorts, the exit route for private equity firms is getting clearer.
Standard Chartered Private Equity Ltd (SCPEL), the private equity arm of Standard Chartered Bank, is planning up to three exits this year from its portfolio companies through the IPO route.
SCPEL is looking at an exit from InterGlobe Technology Quotient (ITQ), a travel outsourcing firm–where it invested about $140 million along with Credit Suisse and Singapore’s DBS Group to buy close to 33% stake in 2008–through a proposed IPO to be floated this year. It is learnt that the IPO size would be in the range of Rs 350-400 crore.
Till date in 2010, there have been about five PE exits through the IPO route. The major exits include Credit Suisse from Shree Ganesh Jewellery House ($84 million), Trikona Trinity from IL&FS Transportation Networks ($154 million), ChrysCapital from Hathway Cable ($142 million), JP Morgan Partners and India private Equity Fund from Jubilant Foodworks ($71 million) and Temasek from Infinite Computer Soulutions India ($41 million). In 2009, in comparison, there were two PE exits made through IPOs and one in 2008, according to VCCEdge data.
InterGlobe Technology Quotient (ITQ), a business unit of InterGlobe Enterprises, is the official distributor of Galileo in India & Sri Lanka and Worldspan in nine markets across the Asia-Pacific region. Galileo’s key clients include Cox and Kings, American Express, Thomas Cook, Travel Corporation of India and HRG SITA. Interglobe is run by the owners of Indigo Airlines. When contacted, Kiran Singh, GM – Marketing & Communications, InterGlobe Enterprises Limited, said, “Being a privately held company, we do not share this kind of information with public at large. So, I am afraid, we will not be able to comment on the questions raised”. Nainesh Jaisingh, MD, SCPEL, did not respond to the queries at the time of posting this article.
Apart from ITQ, the PE major is planning two more exits this year through IPOs. These exits are from portfolio firms Powerica, a Mumbai-based generator manufacturer, and Endurance, a Pune-based auto-component maker. In Powerica, SCPEL had invested $50 million in 2007, while it invested $33 million in Endurance Technologies in 2006. A mail sent to Bharat Oberoi, Joint MD, Powerica, did not elicit a response. Biswajit Choudhary, spokesperson, Endurance Technologies, did not respond to repeated calls.
SCPEL invests between $50 million and $100 million in companies primarily located in China, India, Korea and South East Asia. In 2010, SCPEL invested $50 million in Coffee Day Resorts & Hotels Ltd by acquiring about 5% stake. In 2009, it invested over $100 million in a bunch of companies including Ramkay Infrastructure, Firepro Systems, PI Industries, Mahindra & Mahindra Financial Services Ltd, Man Infraconstruction and Indian Overseas Bank.