TVS Capital ups exposure to IEX

Home-grown private equity firm TVS Capital said on Tuesday it has increased its stake in Indian Energy Exchange (IEX) to 4 per cent by shelling out an additional Rs 9 crore.

TVS Capital, through its fund TVS Shriram Growth Fund-IB, had initially picked up a 3.1 per cent stake for Rs 72 crore from Bessemer Venture Partners last month. That deal came almost a year after a previously announced transaction to invest in the electricity trading platform was scrapped early this year.

The PE firm has now bought additional stake from Bessemer. It has come in as part of the investor consortium led by DCB Power Ventures Ltd of Dalmia Bharat Group.

"We were working very closely with Dalmia Bharat Group for the past one year to buy the stake in IEX. Despite all the legal headwinds we faced, we finally managed to close the deal," said Gopal Srinivasan, chairman and managing director of TVS Capital Funds Ltd.

As part of the investment, Puneet Dalmia, director at TVS Capital, will join the IEX board.

In June this year, Financial Technologies (India) Ltd (FTIL) had inked a pact with DCB Power Ventures, Kiran Vyapar Ltd, Agri Power and Engineering Solutions Pvt Ltd, Aditya Birla Private Equity for selling a 16.6 per cent stake in IEX for 357 crore ($57 million then).

FTIL recently announced that it had tweaked the share purchase agreement signed in June this year to divest two-thirds of its remaining stake in IEX. It said it would offload a 19.06 per cent stake for Rs 410 crore (about $62 million) to the same buyers instead of 16.6 per cent as agreed earlier. Although, TVS Capital has come in as a co-investor with DCB in IEX, it did not buy the stake from FTIL, Srinivasan clarified to VCCircle.

FTIL recently signed a deal to sell its remaining stake in IEX to a firm associated with agri-processing machinery company Milltec.

IEX offers an online power trading platform that about 1,000 private generators and nearly 3,000 industrial consumers use to manage their electricity requirement, according to its website. It counts several other private equity and venture capital investors including Multiples PE and Lightspeed Venture Partners.

Srinivasan said power trading in India is estimated to increase from 3.2 per cent currently to 9-10 per cent over the next five to six years, as the country adds generation capacity and improves its transmission infrastructure. He added that IEX is well-positioned to benefit from the anticipated growth in power trading in the long term.

Bharat Banka, an angel investor and a former MD of Aditya Birla Private Equity, was the sole advisor to TVS Capital Funds for this transaction.

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