According to sources, Bessemer and Lightspeed were in talks with various PE firms, including New Enterprise Associates and Summit Partners, early this year to offload a part of their stake but the recent issues related to FTIL’s National Spot Exchange (NSEL) has made investors wary of picking up a stake in the power exchange. It has also hit the valuations of the bourse, they added.
“The two firms were engaged in initial talks with various other PE funds earlier, but no investor will engage in discussions at this point in time,” said a person aware of the situation. “They had spoken to a whole host of PE firms, but got stuck on valuations,” he added.
The decision of the two PE entities to dilute their holding was also on account of the Foreign Investment Promotion Board (FIPB) norms that stated that any foreign investor could not hold over 5% stake in a power exchange without its approval. The authority, however, has now extended the deadline for complying with the shareholding norms.
Lightspeed and Bessemer bought stake in IEX from PTC Financial Services in December 2010 by shelling out R35 crore each. Sources add that the stake of the two entities increased from 5.5% each to 10% each once the compulsory convertible preference shares or CCPS were converted. “Even though we were having discussions with various PE firms earlier, at this point, we are not in talks with anyone regarding stake sale since we have received an extension on it,” says Bejul Somaia, MD at Lightspeed.