Volrado Venture Partners has sold around two-thirds of its four-year-old investment in Ess Dee Aluminium with over 5x returns over the last nine months. Volrado has been selling in small tranches over the last three quarters and, on Thursday, it sold 2 lakh shares at Rs 438 a piece, almost six times its cost of purchase.
Volrado had invested Rs 11.8 crore through a pre-IPO deal in Ess Dee in May 2006 at a cost of Rs 74 apiece. It held on to its shares for three years and started selling chunks from July-September’09 quarter. The initial set of sale happened when the share price was around Rs 300 giving around 4x returns.
The investment firm then sold another block in October-December’09 when prices were in the Rs 350-400 range and sold out a smaller tranche but at a much higher price this week.
The latest shareholding structure for March’10 is not available yet, but assuming Volrado did not sell any further stake, it is still holding on to around 6 lakh shares which is worth Rs 27.6 crore. Volrado has already made around Rs 39 crore, which means at a consolidated level, it is sitting on unrealised gains of a cool 6x on its four-year-old investment.
Mumbai-based Ess Dee Aluminium, that acquired loss-making India Foils from the Vedanta group two years ago, was also in talks to buy Italy’s packaging company Comital for $125-150 million. It is not clear if that deal has fallen through or still in works.
The firm came up with an IPO in 2006 and is 60% owned by its chairman and managing director Sudip Dutta. It clocked 43% jump in net sales of Rs 401 crore with net profit of Rs 66 crore for the year ended March’09. But at a consolidated level after factoring in loss-making India Foils (which became a subsidiary in November’08) its consolidated revenues for the year stood at Rs 451 crore with net loss of Rs 24 crore.