PermjiInvest, Premji's private equity fund, is said to be closing in on two more technology firms in the US. Azim Premji, the billionaire chairman and majority owner of $5 billion Wipro, has picked up a two per cent stake in Koutons Retail, an apparel retail company, for about Rs 20 crore.
According to information available, Premji picked up about 300,000 shares of the Rs 700 crore publicly listed retail company, from the secondary market, through his private equity fund PremjiInvest.
This is the second investment by Premji in a textiles related company after he had bought a little over three per cent in Bangalore-based Himatsingka Limited. The company which is into textiles exports, also has a growing retail presence in home furnishings.
Ajay Mahajan, chief financial officer, Koutons Retail, confirmed the purchase by Premji. "Textiles retail is growing at a rapid pace in India and this must be one of the reasons that he has picked up shares in the firm," Mahajan said.
Koutons went public in October 2007, raising around Rs 110 crore. It has more than 1,100 stores across India, most of them franchisees. Mahajan said net margins were in the range of 7-8 per cent.
Koutons Retail shares lost under a per cent (or Rs 6.15) to close at Rs 782.65 on the National Stock Exchange on Wednesday, while on the Bombay Stock Exchange it ended just Rs 2.95 lower at Rs 790.
PremjiInvest is said to have a corpus of $1 billion (about Rs 4,000 crore) which is expected to be drawn down over three years. This private equity set-up has a team of about 20 professionals who hunt lucrative investment opportunities.
Only last week, the team received a boost with the announcement by Premji that Sudip Banerjee, a Wipro veteran for over 25 years, will be director on the advisory board of PremjiInvest.
In addition to Koutons and Himatsingka, PremjiInvest has also invested $10 million (about Rs 400 crore) in Cicada Resorts, another Bangalore-based eco-tourism operator.
According to market pundits, PremjiInvest is also zeroing in on two investments in the technology space in the US. "The pattern is that after incubating such companies, Wipro would ideally absorb them at a later stage, mitigating the risks for the NYSE listed IT and consumer goods firm," said an analyst.
