ChrysCapital To Invest Rs 112.5Cr In KPIT Cummins
Private equity major ChrysCapital has started 2010 with a busy note, closing a deal in the first week of the year. The PE firm is picking up a stake in mid-cap information technology firm KPIT Cummins Infosystems Limited for upto Rs 112.5 crore.
January 10, 2011 / 08:07 IST
Private equity major ChrysCapital has started 2010 with a busy note, closing a deal in the first week of the year. The PE firm is picking up a stake in mid-cap information technology firm KPIT Cummins Infosystems Limited for upto Rs 112.5 crore. The stake will be picked up through a preferential issue to ChrysCap entity Warhol Ltd (Mauritius) and subject to shareholders and other regulatory approvals. KPIT has called for an extra-ordinary general meeting (EGM) on February 4.
The deal could fetch ChrysCapital upto a 8.95% stake in the company on a post-dilution basis, subscribing to 7,758,621 equity shares of Rs. 2/- each. The deal has been struck at Rs 145 per share, a 1.75% premium to Friday's closing price of Rs 142.5. The firms share price has reached a 52-week high of Rs 192.9 per share, with the market capitalisation at current price of Rs 142.5 coming to Rs 1,124 crore.Pune-based KPIT, a product engineering and IT consulting firm focused on industries like manufacturing and automobile, had early investors like Rakesh Jhunjhunwala, IFC and Lehman Brothers. KPIT reported revenues for FY10 at Rs 731.64 crore, a Y-o-Y decline of 7.76% but the net profit increased by 30% to Rs 85.7 crore for the fiscal. For Q2FY11, KPIT reported a 33% increase in revenues to Rs 235 crore and a 12% increase in net profit to Rs 23.75 crore on Y-o-Y basis.KPIT Cummins started as a financial auditing firm decades before moving into the field of software and in 2002 acquired the IT arm of diversified machinery maker Cummins Inc, which continues to hold nearly a 15% stake in the firm. Since then KPIT Cummins has done eight
other acquisitions, with two coming in 2010. It also formed a joint venture with world's second largest forging company Bharat Forge to make and sell a new hybrid technology for automobiles in 2010."KPIT is better positioned in the mid-tier Indian IT space to capture growth in spending related to discretionary services such as engineering and enterprise solution due to its domain focus. The company
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