ICICI Ventures has made yet another part exit from its investment in engineering services company VA Tech Wabag that focuses on water and waste water treatment with a multi-bagger. The private equity fund has sold 10% out of its remaining 14.6% (held through two funds) in the company earning Rs 162.6 crore with 7.5x gross returns.
ICICI Ventures has encashed Rs 297 crore through IPO and latest share sale with its remaining stake worth Rs 74 crore against a total investment of Rs 55 crore.
While ICICI Ventures’ Dynamic India Fund I generated 4x returns on its three-and-half-year-old investment, India Advantage Fund I generated returns of about 36x on its four-year- old investment, according to VCCircle estimates.
Bulk of the shares were acquired by Capital International Emerging Markets Growth Fund and Capital International Emerging Markets Fund.
ICICI apparently invested a total of about Rs 55 crore for its holding to support one of the rare management buyouts in India from the company’s Austrian parent VA Tech WABAG GmbH in August 2006. VA Tech Wabag is also backed by investors such as GLG Emerging Markets Fund, Sattva India Opportunities Co and Passport India Investments. GLG had invested Rs 88 crore or about $20 million in February 2007 which translates into 9.55% stake currently with average cost of acquisition pegged at around Rs 988 a piece.
VA Tech Wabag, whose four promoters include British national Rajiv Mittal, Amit Sengupta, Shiv Narayan Saraf and S Varadarajan, raised around Rs 125 crore through fresh issue of shares late last year. Financial investors made Rs 353 crore with ICICI Ventures itself getting Rs 134 crore through shares offered for sale.
VA Tech has presence in drinking water, municipal wastewater, industrial water, industrial wastewater and desalination and is said to be evaluating both organic and inorganic growth opportunities. Some of its competitors includes Veolia Water India, Degremont India, Hindustan Dorr Oliver and L&T in the municipal sector and companies like Thermax, Ion Exchange, EIL, Hindustan Construction, Nagarjuna Constructions, Gammon India and Driplex in the industrial sector.