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Value Pick: New York PE Firm Buys Into Welspun Gujarat

20 August, 2008

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New York-based private equity fund Genesis Asset Managers has acquired over 5 per cent stake in second largest pipe company in the world Welspun Gujarat Stahl Rohren (WGRSL) for around $75-80 million. Mumbai-based WGRSL is the flagship company of $3 billion Welspun Group. The deal values the company at $1.5 billion-$1.6 billion, which is close to its current market capitalisation of around $1.4 billion, according to a report in Reuters.

Last year in a similar deal, UK-based private equity firm 3i Group had invested $80 million for a 6.6 per cent stake in the company. At the end of June, foreign institutional investment in the company stands at 20.79 per cent. The trade was executed through Macquire Capital Securities Pvt Ltd. Genesis Asset Managers has also previously invested in Indraprastha Gas.

Welspun’s clients include Enterprise, Kinder Morgan, Texas Gas, British Petroleum, Hunt Oil, Saudi Aramco, Elpaso, Exxon Mobil, Qatar Petro DOW and Gazprom, among others. The shares of the company closed at Rs 326 at the Bombay Stock Exchange, against their 52-week high of Rs 537.

WGRSL posted a profit after tax of Rs 71.14 crore for the quarter ended June 30, 2008. Total income increased from Rs 817 crore for the quarter ended June 30, 2007 to Rs 1096 crore for the quarter ended June 30, 2008. WGRSL has a $150 million manufacturing facility in Arkansas, USA. It has another manufacturing facility at Kutch, Gujarat. The company has a order book of Rs 7,200 crore and has recently received $545 million order from one of the largest oil and gas companies in the world.


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Value Pick: New York PE Firm Buys Into Welspun Gujarat

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