Ashoka Buildcon offloads 16% to IDFC for Rs 700 cr

Deal values the company around Rs 4,500 crore.

In one of the major private equity deals in the country, infrastructure developer Ashoka Buildcon has offloaded 15.62 per cent stake to IDFC's private equity fund for around Rs 700 crore.

PRIVATE DEAL

THE DEAL was sealed at Rs 980 per equity share

IDFC PE Fund's stake rose to 18.18 per cent from the earlier 2.56 per cent it had bought in the Nashik-based infrastructure major

UNDER THE deal, IDFC PE Fund II has also received right of first refusal and tag-along rights

THE FUND was also looking at reducing its stake to 13.27 per cent during the IPO, which, however, would be decided only at a later stage

The move is of significance, as apart from being one of the major pre-initial public offerings (IPO) deals, this values the unlisted company around Rs 4,500 crore.

The promoters of Ashoka Buildcon has offloaded 15.62 per cent stake of the company's equity capital, amounting to around 72 lakh shares, to IDFC Infrastructure Fund II.

The deal was sealed at Rs 980 per equity share, sources close to the development said.

Pursuant to the stake acquisition, IDFC PE Fund's stake rose to 18.18 per cent from the earlier 2.56 per cent it had bought in the Nashik-based infrastructure major.

The fund will nominate a director on the Ashoka Buildcon's board and both the companies will set up a project committee to jointly bid for other infrastructure opportunities.

When contacted executives of both the companies declined to comment on the development.

Ashoka Buildcon, which had filed a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) for an IPO, is currently under the mandatory silent period.

Under the deal, IDFC PE Fund II has also received right of first refusal and tag-along rights. The fund was also looking at reducing its stake to 13.27 per cent during the IPO, which, however, would be decided only at a later stage, sources said.

Ashoka Buildcon was planning offload 8,100,000 equity shares of Rs 10 each.

The price was to be decided through a book-building process, while the company was looking at using the proceeds for its expansion plans. The company is engaged in toll-based BOT projects in Maharashtra, Madhya Pradesh, Chhattisgarh, Rajasthan, Gujarat, Goa, Delhi and Tamil Nadu.

IDFC-SSKI, Enam Securities and Kotak Mahindra Capital are the book running lead managers for the issue.