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Private equity firm ICICI Venture has picked up a 14.9% stake in Mumbai-based textile and real estate development firm Arrow Webtex through a preferential allotment. The deal is estimated to be in the region of around Rs 130-140 crore. The transaction gives the private equity fund a stake marginally below the level which mandates an open offer for public listed firms in India.
Arrow Webtex is engaged in the business of woven and printed labels, elastic tapes, apart from various activities related to real estate, hospitality and gaming business through its subsidiaries. For the quarter ending December 2007, it had consolidated net sales of Rs 46.03 crore with consolidated net profit of Rs 2.76 crore. The company has a market capitalisation of around Rs 645 crore. As per the disclosures made to the stock exchanges, ICICI Venture, which manages various private equity, real estate and mezzanine funds, has picked up around 2.03 crore shares through the allotment last week. If the deal was struck at the market price on the day, it would be valued at about Rs 132 crore. However, preferential allotments are usually done at a small premium. Early this month, Arrow Webtex had also made another preferential allotment to another firm, Pacific Corporate Services. This deal gave Pacific Corporate Services a 8.8% equity stake in Arrow Webtex. Through the two equity placements, the company has now raised about Rs 200 crore over the past two weeks. As of December 2007, the promoters held 71.94% stake in Arrow Webtex. The rest was with public and corporate bodies. There was negligible institutional holding in the firm. After the two equity placements, the promoters stake would have come down below the 60% mark. The single-largest shareholder of Arrow Webtex is Zia Mody, a well-known lawyer. Her husband, Jaydev Mody, who is a minority stakeholder in Arrow Webtex, is into the business of real estate development and consultancy. Source: Economic Times
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