Private equity firm Wayzata is investing Rs 50 crore in public-listed Ramkrishna Forgings Ltd through a preferential allotment. Through Wayzata II Indian Ocean Limited, the PE firm is picking up a 13.35 per cent stake (post dilution) or over 3.72 million shares of the company.
The development comes after International Finance Corporation (IFC) picked up 8.9 per cent stake in Kolkata-based Ramkrishna Forgings in December 2012. The World Bank arm also said it will provide debt for the firm’s greenfield expansion programme in Jamshedpur that includes a new front axle beam manufacturing line.
The shares will be issued at Rs 132.75 per unit, a 27.4 per cent premium to its closing price on Friday of Rs 104.25. IFC invested in the firm at Rs 128 a unit and recently the promoters also picked up convertible warrants worth Rs 40 crore at Rs 130 a share.
Founded in 1981, RKFL manufactures and sells open and closed plain carbon and low-alloy steel forgings for railways, automobile and general engineering purposes. The company, which went public eight years ago, had earlier received funding from Phi Advisors and Ascent India Fund.
Recently Ramakrishna said it has entered into a definitive agreement to acquire travel services provider Globe Forex and Travels Ltd. The company provides travel and travel-related services like travel, forex, cargo, MICE and tours with turnover of Rs 159.85 crore as on March 31, 2012. Shares of Ramkrishna slipped on the news of diversification into an unrelated area.
For first six months of FY13, Ramkrishna reported a 7.5 per cent fall in total income to Rs 212.43 crore with net profit falling 21 per cent to Rs 8.41 crore.
Wayzata is focused on the manufacturing sector in India having backed companies like S.H. Kelkar (manufacturer of fragrances and flavours), Topack Fittings (maker of steel products), Biltube Industries (paper packaging products) and Phthalo (chemical manufacturer).
(Edited by Prem Udayabhanu)