Nalanda Capital Pte Ltd, a Singapore-based private equity firm founded by former Warburg Pincus India MD Pulak Prasad, has acquired more than 5 per cent stake in Ahmedabad-based AIA Engineering over the past few months. The private equity firm has picked 5.02 stake through multiple market purchases which would have cost it between Rs 150-170 crore, according to VCCircle estimates.
AIA Engineering manufactures and designs engineering components for various industries such as cement, mining and thermal power generation. The company also provides services for installation of high chromium wear and corrosion and abrasion-resistant parts used in these industries. According to its website, AIA is the second largest hi-chrome casting producer in the world.
Nalanda India Equity Fund picked up the shares in the latest round of buying on October 28, when the share price of AIA closed at Rs 310. However, Nalanda did not figure among the AIA shareholders as of June 2011, which means the PE firm started acquiring stake in the company during the past 4-5 months. Other investors in AIA include PineBridge Investments Asia, T Rowe Price and Genesis Indian Investment Company, among others.
Share price of AIA Engineering closed at Rs 313.15 per unit on Tuesday, up 0.69 per cent in a weak Mumbai market down 1.27 per cent.
AIA Engineering reported 21.2 per cent increase in revenues in FY11 at Rs 1,171 crore, with net profit going up 7.4 per cent to Rs 183.3 crore. For Q1FY12, it reported 9 per cent (YoY) growth in net sales while the profit after tax slipped marginally to Rs 39.7 crore.
With the peaking demand for high chrome mill internals for the mining segment, AIA is setting up additional 1 lakh MT capacity that will involve a capex of Rs 250 crore.
“The company continues to maintain its leadership position in the industry. Its strong debt-free balance sheet accounted for low financial charges that resulted in the PAT of Rs 39.7 crore for the quarter,” said a Kotak Securities report, dated August 2011.
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