Adani Power files for IPO; 3i's Investment in positive zone

Adani Power, a part of Gautam Adani-led business conglomerate with interests spanning from FMCG to infrastructure, has approached the market regulator SEBI with a revised IPO plan, estimated to raise more than Rs 2,000 crore. This is the second time Adani Power is planning to come out with an initial public offer (IPO), as its previous attempt was scuttled due to adverse market conditions. In its revised draft prospectus filed with SEBI, Adani Power has proposed to sell over 330 million equity shares of Rs 10 face value each, which would account for about 15% of the company's post-issue equity capital. While the price of the shares to be offered in IPO would be decided later, the company has said in the draft prospectus that it expects to utilise Rs 2,193 crore of net proceeds from the public issue to fund its power projects - Mundra IV in Gujarat and Tiroda in Maharashtra.

What about 3i's investment?

With this development, it is now confirmed that UK-based 3i’s investment in Adani Power remains in the positive zone. The average cost of acquisition for 3i is pegged at Rs 59.5/share. Adani Power seeks to raise Rs 2,193 crore through the issue which would translate into per share price of around Rs 65-70 given that the issue comprises 33.05 crore shares including 80 lakh shares reserved for the employees. Though 3i would be sitting on profit at this valuation, looking at the opportunity cost of the fund(had it been invested in some debt instrument) it could have earned a higher return.

Earlier, the private equity fund had invested Rs 900 crore in Adani Power in two tranches-- October 2007 and April 2008. The PE firm subscribed to 8.4 crore shares as a result of these two transactions which now stands at 15.14 crore shares due to a 4:5 bonus issue at Adani Power last year. 3i holds 8.22% stake in Adani Power before the IPO which would become 6.92% post issue.

Source: Business Standard, VCCIRCLE

3i eyes new deals in health care sector

European private equity firm 3i Group Plc is exploring fresh investments in India’s health care sector, nearly two years after it made its first. “We are currently looking at several proposals for comparatively large investments in the country’s pharmaceuticals, medical devices manufacturing, and health care and laboratory services industries, including large and medium hospital groups,” said Mahesh Chhabria, partner, 3i India Pvt. Ltd, the local arm of the London-listed buyout firm. 3i India’s previous investment in the sector was in May 2007, in clinical research organization Siro Clinpharm Pvt. Ltd, the country’s largest fully integrated clinical trials organization. The firm has been in India since 2005; its investment portfolio here is currently valued at $920 million Chhabria said in an interview with Mint on Thursday that the new investments could be in the form of a local acquisition by Siro Clinpharm. Siro Climpharm, which acquired German clinical trials company Omega Mediation group and its associates in Europe in May, will look at one or two strategic acquisitions in India after the integration is completed this year. “Our investments had been in companies which are either the only player or the leaders in that particular sector, and the deals were not below $30 million (Rs151.5 crore),” Chhabria said. 3i Group has been in India since 2005 and has invested in sectors including media, automotive, construction, power, ports and manufacturing. The firm’s investment portfolio in India is currently valued at $920 million. In 2007, the private equity firm also signed a strategic partnership with India Infrastructure Finance Co. Ltd to invest in public works. After launching a $1.2 billion India infrastructure fund in 2008, it has so far invested at least $330 million in Indian utilities, according to information on its website. Globally, 3i Group has health care investments valued at €1.6 billion (Rs10,976 crore). In January, the firm hired John Moore, a former managing director and global head of health care investment banking at Morgan Stanley, as a partner responsible for its health care investment strategy across the US.