Private equity firm CX Partners has bought an 8 percent stake in steel company Monnet Ispat for Rs 150 crore from the secondary market, its first investment since launch in August 2008.
“We are looking at a close association with Monnet Ispat and will help build the company further,” said Ajay Relan, promoter of the $500-million firm and former managing director of Citigroup Venture Capital International. A Monnet Ispat spokesman, however, declined to comment.
CX bought the stake from a clutch of foreign institutional investors for nearly Rs 390 a share during the last two months. The deal values Monnet Ispat at Rs 1,875 crore against its market capitalisation of Rs 2,083 crore. Monnet Ispat shares fell marginally to close at Rs 435 on the BSE on Thursday.
FIIs owned a 33.76 percent stake in Monnet Ispat as per the company's last disclosure to the stock market in December 31, 2009.
Sandeep Jajodia-led Monnet Ispat runs a 5 lakh tonne steel plant at Raipur in Chhattisgarh. The company is establishing another 1.5 million tonne integrated plant and an 80 mw power factory at the same location, which together is estimated to cost Rs 4,000 crore.
The investment is a second innings of sorts in Monnet Ispat for Mr Relan. He was on the company's board from 2004 to 2008, courtesy the Citi offshoot's 14 percent stake. Citi exited the company in tranches in mid-2008 and during the same period, Mr Relan quit the fund to start his own private equity venture. Mr Relan could join the Monnet Ispat board again, said a person familiar with the matter. The board has six directors and two independent directors.
Key investors in CX Partners include Morgan Creek Capital, Goldman Sachs, JP Morgan, Asia Alternatives and Adams Street.
Source: Trading Markets