Standard Chartered Private Equity Ltd (SCPEL), the PE arm of global banking major Standard Chartered, is considering an exit from its portfolio company, Endurance Technologies. The exit will be via an initial public offer (IPO). Endurance?s IPO is expected to be floated early next year.
Biswajit Choudhury, VP, marketing, and spokesperson, Endurance said, ?We are unable to comment as nothing has been worked out on the IPO front.? Officials from SCPEL could not be reached for comments.
SCPEL had invested Rs 150 crore in Endurance Technologies in August 2006. Though the company is looking to exit another investment in Powerica Ltd, it is likely to take some more time, industry sources said. SCPEL had acquired about 10% in the Mumbai-based genset manufacturer in May 2007 for $50 million.
So far in India, SCPEL has made investments worth about $430 million in 10 companies and exited partially from six, and completely from three. SCPEL has corporate biggies like ABG Shipyard, Mahindra & Mahindra Financial Services and Karur Vysya Bank and Indian Overseas Bank in its portfolio.
The Aurangabad-based Endurance, which manufactures aluminium casting (including alloy wheel), suspension, transmission and braking products, has an annual sale of Rs 1,634 crore from domestic operations and Rs 674 crore from overseas operations for the year 2008-09. Endurance Group, which has 19 plants across India, Italy and Germany, supplies the bulk of its production to Bajaj Auto.
According to Vaishali Jajoo, an auto analyst with Angel Broking, there would be robust growth in the auto industry and, as a corollary, in the auto ancillary industry as well. ?There would be about 9-10% CAGR growth for the next two years in the auto industry as far as volume is concerned. The growth will tempt auto ancillary manufactures to expand their capacities with new funds,? she added.
As the market performs well, PE firms look to exit through IPOs, which was impossible in the recent past due to the economic downturn. For instance, Indiabulls Power Ltd, in which the UK-based PE firm Fim Ltd holds about 18%, has announced its plans to raise up to Rs 1,758 crore from an IPO. Also, this month, Shree Ganesh Jewellery House has filed the draft red herring prospectus for an IPO, so that Credit Suisse, which holds about 11% stake, can exit.
DB Corp, publisher of Dainik Bhaskar, has also filed a draft red herring prospectus for an IPO. Cliffrose Investments Ltd, a Warburg Pincus affiliate, holds 7.14% stake in it.
Other PE-backed firms looking to float IPOs include Hathway Cable (ChrysCapital), Reliance Infratel (Fortress Capital, New Silk Route), Vascon Engineers (HDFC Property Fund) and IL&FS Transportation Networks (Trikona Trinity).
