As IPO market booms in India, 2016 set to be record year for private equity players exits

By: | Published: August 22, 2016 6:32 AM

With a host of companies including RBL Bank, PNB Housing Finance, Hinduja Leyland Finance set to go public, 2016 should be a record year for exits by private equity (PE) players.

Hinduja Leyland Finance, which has received a Sebi approval, is looking to raise some R500 crore. This includes an offer for sale of shares by PE fund Everstone Capital. Hinduja Leyland Finance, which has received a Sebi approval, is looking to raise some R500 crore. This includes an offer for sale of shares by PE fund Everstone Capital.

With a host of companies including RBL Bank, PNB Housing Finance, Hinduja Leyland Finance set to go public, 2016 should be a record year for exits by  private equity (PE) players.  Prime Database puts the value of exits by PE funds, in the first six months of the year, at around R3,236 crore. In contrast PE funds made a much smaller R2,346 crore from a dozen IPOs (Initial Public Offering) last year and only R329.59 crore in 2014.

Among those PE players that will sell shares in RBL Bank are Beacon India, Gaja Capital and Capvent. Meanwhile Carlyle holds at 49% stake in PNB Housing though it’s not clear yet whether it will sell a stake. A dozen PE investors including Sequoia Capital sold shares worth R1,454 crore in MFI turned small finance bank Equitas in April. Jacob Kurian, Partner at New Silk Route which manages a $1.4 billion Asia-focused fund expects the IPO market to remain strong for the next six months unless there is a black swan moment in between. Since mid- 2015 NSR has part exited three portfolio companies through IPOs — VRL Logistics, Ortel Communications and Cafe Coffee Day. “We plan to exit five more this year either by strategic sale or through IPOs,” Kurian says.

Hinduja Leyland Finance, which has received a Sebi approval, is looking to raise some R500 crore. This includes an offer for sale of shares by PE fund Everstone Capital.

In July 2013, Everstone had invested R200 crore for a 15% stake in the company.

Gaja Capital is looking to sell a part of its stake in Education services player CL Educate Ltd. Companies that are awaiting a SEBI nod include Seaways Shipping, Varun Beverages, Endurance Technologies and Aster DM Healthcare. IDFC Private equity had invested R120 crore in Seaways Shipping in 2008 for a 24% stake and will exit completely.

Again, Standard Chartered Private Equity and Aion Capital Partner are likely to dilute apart of their stakes in Varun Beverages. Standard Charted had invested $48 million and $32 million in the firm in 2011 and 2012, respectively.

Aion Capital invested $90 million in the company in October last year through a mix of primary capital infusion and purchase of shares from Standard Chartered Private Equity.

Also, Actis Advisers, which holds a stake of 13.72% in Endurance Technologies plans to exit the investment through a proposed IPO by the Aurangabad-based auto components maker. Olympus Capital and India Value Fund which have invested close to $150 million so far in Aster DM Healthcare, could offload part of their stakes in the company.

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