Domestic private equity firm Subhkam Ventures is on an exit mode from its five-year-old investment in MSK Projects with 1.2x net returns. Mumbai-based Subhkam founded by Rakesh Kathotia also owns broking entities Subhkam Stocks & Shares Ltd and Subhkam Securities.
It had invested Rs 9.8 crore to pick over 9% in MSK in August 2005 and in October 2007 invested another Rs 33.6 crore through the preferential route. Its average cost of purchase works out to be Rs 80/share.
It has sold almost 20 lakh shares or a little less than half of its total holding of 54 lakh shares in the open market this week. The shares were sold at Rs 179 a piece(first tranche) and thereafter at Rs 193 a piece (second half), translating into 1.3x net return on the average cost price.
Construction firm MSK Projects has been engaged in various segments of the business including roads, industrial, residential and commercial construction. Last month Welspun group(Welspun Infratech Ltd along with Welspun Gujarat Stahl Rohren Ltd) had announced that it has struck a deal to acquire almost the entire promoter holding of around 22% and made an open offer to acquire further shares to gain majority stake for Rs 130.5 a share. The stock has run up over 50% over the last two months.
Subhkam has sold the shares in the open market where the stock is trading at a much higher price. Subhkam’s portfolio (past and present) includes names such as Ansal Housing, Mid Valley Entertainment, Nagarjuna Construction, Sterling Holiday, Travelport and Unicon Financial. Early this year one of its portfolio companies Aqua Logistics went public after an IPO.