Wednesday, January 25, 2012

Nalanda Capital Ups Stake In Exide To 5%; Exposure Crosses $100M

The Singapore-based PE firm, founded by former Warburg Pincus India MD, has been bottom-fishing in its portfolio firms.

Nalanda Capital has increased its holdings in Exide Industries to 5.01 per cent, according to a company disclosure to the Bombay Stock Exchange. The private equity firm, which focuses on public-listed Indian companies, already held 4.59 per cent stake as on December 31, 2011. It boosted its holding marginally in the past few weeks to 4.91 per cent and bought 0.10 per cent afresh to take the total holding to 5.01 per cent.

Nalanda Capital is estimated to have invested around Rs 40 crore ($8 million) this month to acquire the additional 0.42 per cent in Exide.
At 12:51 pm, shares of Exide Industries were trading at Rs 127.80 on the BSE, up 1.59 per cent from the previous close.
At this price, Nalanda’s existing equity stake is worth around Rs 544 crore or $106 million.
Nalanda started building its exposure in Exide, the country’s largest battery maker, around one year ago and held a little over 1 per cent as of March 31, 2011. It bought more shares in the three months ended June 30, 2011, and once again bought a chunk of shares in the last quarter.
According to VCCircle estimates, Nalanda Capital has invested a total of over Rs 510 crore ($100 million) in the company over a period of time, making Exide its biggest portfolio company in terms of exposure.
Nalanda’s heavy bet on Exide is interesting, given the level of exposure. The Singapore-based PE firm, founded by former Warburg Pincus India MD Pulak Prasad, has around $875 million under management through two funds and Exide comprises around 11.5 per cent of its total assets.
Kolkata-based Exide manufactures and sells lead acid storage batteries for automotive, industrial and submarine applications. It is the largest player in the business and much ahead of the No. 2 firm Amara Raja Batteries, which is backed by Sequoia Capital.

Nalanda Capital’s Strategy

Part of the latest investment could be to average out the high cost of acquisition per share in Exide early last year. But the latest initiative is in line with the PE firm putting fresh money in its existing portfolio companies as stock market valuations have tanked to near two-year low.
Last week, Nalanda Capital increased its stake in Ratnamani Metals and Tubes Ltd to 10.47 per cent. The firm has been building its exposure to the steel tubes and pipes maker Ratnamani since early 2010. Its holding crossed 1 per cent in the quarter ended June 2010 and it had been slowly increasing its exposure in the firm ever since.
A fortnight ago, the firm also bought an additional 0.16 per cent in Great Eastern Shipping Company. The PE firm had been building stake in Great Eastern Shipping for the past six months. It had apparently acquired 2.14 per cent stake in the shipping firm during July-September quarter and hiked it to 4.95 per cent by December 31, 2011.
Last November, Nalanda Capital had increased its holding in AIA Engineering Ltd (which manufactures and designs engineering components) to 6.3 per cent. The PE firm acquired the additional 1.2 million shares or 1.27 per cent stake for a total consideration of Rs 37.2 crore. This had taken its total exposure to the company to around Rs 200 crore.

My Comments:
Friends, Nalanda Capital an fin institution readers needs to keep a tab on.Wherever Nalanda has invested the stock has not gone down much or are faring well.
Try to find out where Nalanda has invested.One can find some in this article itself.
Nalanda has increased the stake in Exide from 1% in Mar 2011 to 5% and that reconfirms my bullishness in HBL Power and Pondy Oxide.


  1. @Rajeev Any views on Sujana Towers and Sujana Metal Products?

  2. ramesh,
    Sujana Towers should do good in LT, do not track Sujana Metal so no view

  3. Hi Rajeev pls tell me about Atul ltd and Prakash Indus should I buy more or what, and Rajeev sir if u had 50lacs to invest and ur age is 33 and no loan and having ur own house and office how will u put this money at work ,regards namit

  4. Hi Namit,
    I still like Atul Ltd.When I recomended it was around, what 120-130 , not sure exactly the price and it has gone up instead of going down in bear market.
    They have lots of acres of land maybe 100 acres or even more and the prices in that region in Gujarat has gone up exponentially.The prices has gone up by 10 times from when I left my native state Guajarat in 2008 , means in 3-4 yrs the prices has gone up by 10 times.
    I do not track Prakash Ind so no view.
    Now your main question, man u r lucky.U have 50 lacs in hands to invest when marker is down and valuation is so low!
    Well, what I would suggest is don't invest in one go and find stocks which are fundamentally good.I think the list I gave on Christmas Eve are excellent according to me.
    Invest in A gr stocks as well like Seimens Ltd, Nevly Lignite and wait hold for 3-4 yrs.
    In Bgr stocks I have again given a good list where fundamentals are sound, except KPIT where I have given a switch over call.
    Sell the laggards from the PF and buy new stocks which have grown up even in this bad market, means which has shown growth in sales and bottomline as well.
    It is not hard to find out from the list I gave.Selan also looks good.Oil will remain up and hence sectors like exploration and refinary will have good time.
    But I would suggest to keep aside some money for emergency.One never knows when one will need it.Don't invest all, maybe 50-60% of 5o lacs should be a good idea and if one becomes more risky , one can go upto 70-80% of 50 lacs......
    I hope all readers read this and act accordingly.....

  5. Thanks for ur advice , sir I'll like and love to disturb u again in future , jai ho