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Standard Chartered Private Equity ups stake in Redington India

07 October, 2016

Standard Chartered Private Equity (SCPE) has bought an additional 3.48% stake in Chennai IT products distributor Redington (India) Ltd through an off-market transaction, it said on Friday.

Although it did not share further details, based on separate regulatory filings earlier, it is believed to have shelled out around Rs 153 crore ($23 million) for the stake.

Email query sent to SCPE did not elicit any response till the time of filing this report.

The private equity arm of London-headquartered bank Standard Chartered Plc had previously acquired 10% stake for Rs 365.13 crore, and another 1.99% stake by way of transfer of shares in 2011,. taking the total holding to 11.9% in the company.

Post the transaction, it’s holding in Redington has got bumped up to 15.41%.

SCPE declined to comment on the development.

US-based global IT products distributor Synnex is also a strategic shareholder in Redington, which went public in 2007. Synnex is the single-largest shareholder with 23.58% stake in the company.

Founded in 1961 as G Kewalram Pvt. Ltd, Redington India forayed into the distribution of IT products in the 1990s. The company then augmented its footprint into distribution of telecom products to tap the increasing demand for mobile handsets. It is one of the largest resellers of Apple iPhones.

The promoters have been looking at selling their stake for several years and earlier were in talks with Japan’s Itochu. However, the deal hit a roadblock due to differences over valuation. However, the promoters kept on diluting their holding in small lots through market sale.

In June, Singapore-based Kewalram Chanrai Group sold over one-third of its holding in the company through secondary market transactions. Harrow Investment Holding (formerly known as Redington Mauritius Ltd) that held 13.33% stake in Redington as of March 31, 2016, sold 5% stake of the firm for Rs 219 crore ($32.7 million).

Two years ago, Redington had sold its non-banking finance company (NBFC) subsidiary Easyaccess Financial Services Ltd to the promoters. This NBFC was set up in 2008 to help finance channel partners in the distribution network.

According to Religare Securities research report dated May 2016, the company’s fourth quarter revenues grew 27.5% year-on-year to Rs 104 billion, led by a strong 40% growth in the overseas business. Growth was led by the addition of Apple Inc’s product distribution work in overseas geographies.

In the company’s analyst interaction in July, Redington said its 68% revenue contribution is from IT products and the balance 32% is from mobility, compared to 78% and 22%, respectively same quarter last year. Besides India, the company has also contract for sale of Apple iPhone for two markets – UAE and Nigeria.

On a consolidated basis, net profit of Redington India rose 13.2% to Rs 93.08 crore and net sales went up 27.26% to Rs 9632.95 crore in the first quarter ended 30 June 2016 over the year-ago-period.

For the year ended March, Redington’s net sales grew 12.2% to Rs 31,554.8 crore with net profit rising 10% to Rs 425.6 crore.

Redington scrip rose 1.49% to end at Rs 108.7 a share on BSE in a flat Mumbai market on Monday.

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Standard Chartered Private Equity ups stake in Redington India

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