SAIF Partners appears to be on the way out of its two-and-a-half-years-old investment in lighting & electrical products maker Havells India. The Asia-focused private equity firm, backed by Japan’s Softbank, has sold almost half of its remaining 2.7 per cent stake in Warburg Pincus-backed Havells on Monday with over 3x returns.
SAIF started investing in Havells in the second half of 2008 when the stock market valuations were close to bottoming out. It invested around Rs 80-82 crore ($18 million) in the Noida-headquartered company through open market purchases to garner around 4.9 per cent by March 2009, when the markets hit their lowest level in years.
The PE firm started pulling out one-and-a-half years later by selling some shares in the July-September 2010 quarter when share price of the Havells hit a high of Rs 840 a piece, almost 3.5x the estimated average cost of purchase for SAIF. The part-exit could have fetched around Rs 28-30 crore with over 3x returns.
In the following quarter, SAIF sold almost a quarter of its holding post a bonus issue and could have pocketed around Rs 53 crore, thereby taking out the original investment cost. It again sold some shares worth around Rs 6 crore in the January-March quarter this year and encashed Rs 62.2 crore in the latest round of share sale. Its remaining holding, pegged around 1.48 per cent, is valued at Rs 71 crore. In total, it is estimated to have made around 2.6x on this investment.
Havells had acquired Sylvania four years ago, catapulting it at one shot as the world’s fourth largest manufacturer of lighting products faced grim prospects since its key European business had to bear the brunt of the economic slowdown in 2008. However, the firm undertook a massive restructuring in the following year and recently turned around its overseas operations.
Last month, SAIF had invested $4 million in the first round of funding for Pune-based BrainBees Solutions Pvt Ltd, which runs the online baby products shop Firstcry.com. Also, a number of its portfolio firms are in the process of going public. These include restaurant chains operator Speciality Restaurants, Mumbai-based local search firm Just Dial Pvt Ltd and mobile VAS firm One97 Communications. One of its portfolio firms, the country’s leading online travel company MakeMyTrip Ltd, had also listed on NASDAQ last year.