Strategic Ventures Fund Ltd (SVF), a private equity fund managed by Frontline Strategy Ltd, has divested its holding in Kolkata-based Titagarh Wagons, a private railway wagon manufacturing company. After investing an undisclosed sum as growth capital in Titagarh in July 2005, the PE player exited with 5x returns, a company statement said.
It sold its stake through a mix of trade sales, secondary market sale and an IPO offer.
The development comes weeks after SVF exited Shilpa Medicare Ltd with 4x returns on its investment made in 2005. SVF, which bought 7.72% stake in Shilpa, sold its shares through the open market in January 2010 for more than Rs 34 crore.
SVF has made a total of 15 investments in Indian companies and Titagarh was the ninth complete divestment of the company, the statement said.
After SVF’s investment in 2006, Titagarh Wagons raised equity from other institutional investors such as ChrysCapital, Indus Capital and GE Capital.
Titagarh Wagons is one of the leading private sector wagon manufacturers in India. It manufactures railway wagons, bailey bridges, heavy earth moving and mining equipment. In April 2009, Bangalore-based private equity fund 2i Capital made partial exit from Titagarh Wagons. It sold a 2.71% stake in Titagarh for a total sum of Rs 9.55 crore to hedge fund Indus Capital Advisors. 2i Capital had invested Rs 24.7 crore in Titagarh Wagons in March 2006. ChrysCapital, another investor in Titagarh, invested around Rs 55 crore in 2006. General Electric Co. also owns 15% stake in the company.
Frontline Strategy currently manages two India-centric funds: Strategic Ventures Fund and India Industrial Growth Fund. Other investments of SVP in India are CBay Systems & Services, Astra Microwave Products and Alfa Transformers. Frontline Strategy is one of the country’s oldest independent PE advisory firm incorporated in Mauritius in 2000.