FT adds another jolt to Blackstone's kitty

Besides its investment in FT, Blackstone witness erosion of 60-80% in value of its investments in other listed companies in India

Blackstone, one of the largest global private equity funds, has of late been witnessing the value of its listed portfolios dropping. Adding more woes, shares of Financial Technologies (FT) have fallen about 85 per cent in the past couple of months.

Blackstone, which holds 7.02 per cent in FT, increased its stake during September when the price was between Rs 800 and Rs 850. Blackstone had made an investment worth Rs 250 crore in FT, now reduced to Rs 46 crore. On Tuesday, FT shares closed at Rs 143 on the BSE.

FT’s shares fell 70 per cent during July-August, after the Jignesh Shah-led company had announced suspension of trading in National Spot Exchange Ltd (NSEL) and deferred client payments. The shares went down further last month, FT disclosed its auditor has warned that the audit report for 2013 should not be relied upon in the light of the irregularities related to subsidiary NSEL.

An email questionnaire sent to a Blackstone spokesperson did not elicit any response.

Besides its investment in FT, Blackstone also saw erosion of 60-80 per cent in the value of investments in other listed companies in India.

The fund, which has invested about $60 million in Allcargo Global Logistics since 2008, has seen a drastic fall in the latter’s share price. It had converted the fully and compulsory convertible debentures of Allcargo in September 2009 at Rs 934 a share. Although there was a stock split, shares of Allcargo, in which Blackstone currently holds 14.44 per cent stake, touched their 52-week low of Rs 60 in August this year and closed at Rs 98 apiece on Tuesday.

“As compared to other PE majors with operations in India, Blackstone has the largest basket of portfolios. However, lack of focus, as well as increased exposure in power and infrastructure, has made the company unable to make profits from its investments,” said the managing director of a US-based PE fund.

Currently, shares of Nagarjuna Constructions Co Ltd (NCC), in which Blackstone holds a 10 per cent stake, are being traded at Rs 18.15 on the BSE. Blackstone had invested about $150 million in NCC to buy 12.2 per cent stake, and the latter had issued 20.2 million equity shares of Rs 202.50 each and 9.1 million warrants of Rs 225 each to Blackstone.

The PE fund had increased its stake holding in Monnet Ispat to 7.1 per cent in 2011, buying shares at prices ranging from Rs 478 to Rs 500. On Tuesday, shares of Monnet Ispat closed at Rs 350 on the BSE.

In Gokaldas Exports, where Blackstone remains the promoter and holds a 68 per cent sake, share prices have plunged 87 per cent from Rs 275 to Rs 36 apiece. Blackstone had invested $158 million in the export company in 2007 for Rs 275 apiece.