Private equity backed engineering services company that focuses on water and waste water treatment, VA Tech Wabag, made a strong debut listing with 26% premium to issue price and in early hours is trading 32% higher than the issue price of Rs 1,310 per share.
At the ruling market price, the firm is valued at Rs 1,610 crore ($362 million), translating into a multi-bagger for ICICI Venture. The private equity firm along with the management paid out somewhere in the region of around Rs 50-60 crore to acquire majority equity holding in the company in one of the rare management buyouts in India from its Austrian parent VA Tech WABAG GmbH in August 2006.
The company is backed by a host of private equity investors and some made part exit including ICICI Ventures and others such as GLG Emerging Markets Fund, Sattva India Opportunities Co and Passport India Investments. GLG had invested Rs 88 crore or about $20 million in February 2007 which translates into 9.55% stake currently with average cost of acquisition pegged at around Rs 988 a piece.
VA Tech Wabag has four promoters led by British national Rajiv Mittal who owns 21.6% pre IPO followed by Amit Sengupta (5.6%), Shiv Narayan Saraf (5.11%) and S Varadarajan (5.11%). They will also be big gainers in the IPO. The cost of acquisition of shares for these four executives is pegged between Rs 3-7/share. The company raised around Rs 125 crore through fresh issue of shares.
VA Tech has presence in drinking water, municipal wastewater, industrial water, industrial wastewater and desalination and is said to be evaluating both organic and inorganic growth opportunities. Some of its competitors includes Veolia Water India, Degremont India, Hindustan Dorr Oliver and L&T in the municipal sector and companies like Thermax, Ion Exchange, EIL, Hindustan Construction, Nagarjuna Constructions, Gammon India and Driplex in the industrial sector.