Private equity major Warburg Pincus has completely exited its investment in listed media firm DB Corp Ltd by selling its 3.6 per cent stake in the market for Rs 157 crore on Thursday. Warburg Pincus, which invested in the publisher of Hindi daily Dainik Bhaskar in 2006, will make around 1.82x on this exit according to VCCircle estimates.
Warburg Pincus sold its entire stake, held by its entity Cliffrose Investment, in a single bulk deal on the NSE at a share price of Rs 237.5. The share price of DB Corp, part of the Dainik Bhaskar Group, was trading at Rs 243.4 per share on the BSE in early trade, up 3.11 per cent.
Warburg Pincus had made a partial exit during the company’s initial public offering in late 2009, selling shares for Rs 115.5 crore. The issue was heavily subscribed at 39.54 times and the company was listed at the upper end of the price band of Rs 185-212 per share.
With the current stake sale, Warburg has made a total return of Rs 273 crore on its Rs 150 crore investment.
For the June quarter, DB Corp has reported 12 per cent increase in quarter-on-quarter (Q-o-Q) net sales at Rs 354 crore on advertising and circulation growth, with net profit up 37 per cent Q-o-Q at Rs 61 crore.
“DB Corp is well-positioned to capture advertising growth in regional markets. The company’s entry into Maharashtra and its further plans to enter Bihar support long-term earnings outlook. We believe DB Corp will grow at a rate of 15per cent to 18 per cent for the next two years, driven by higher advertising revenue and healthy growth in circulation revenue,” a recent report from KR Choksey stated.
Earlier this year, Warburg Pincus had invested $150 million in Bhopal-based Diligent Power Pvt Ltd, another Bhaskar Group company which is in the process of setting up power projects aggregating to 6,400 MW.
The private equity firm has made several market exits over the last couple of months. In July this year, it sold 2.28 per cent stake in private sector lender Kotak Mahindra Bank Ltd for Rs 768 crore while in June, it offloaded 1.96 per cent in Max India, which houses insurance and healthcare businesses of Analjit Singh.
Warburg Pincus, which is reportedly targeting $12 billion for a new fund, has also been a fairly prolific deal-maker since June, 2010, committing over $500 million across half-a-dozen companies.