ICICI Venture Funds completely exited from the water management company VA Tech Wabag Ltd, selling its five per cent holding in the company for around Rs 68 crore. It has exited with almost 10 times of its investment.
Japan-based Sumitomo Corporation has bought the stake from the venture funds, according to a company executive.
According to Bombay Stock Exchange (BSE) bulk data, Dynamic Fund I and India Advantage Fund I, have sold 259,095 and 232,163 shares respectively at the rate of Rs 1,400 per share. On the other side, Sumitomo Corporation has bought 491,384 shares at the rate of Rs 1,400 a share. The total amount involved works to around Rs 68.79 crore. It may be noted that ICICI Venture Funds had invested around Rs 60 crore for a 75 per cent stake when it supported a management buyout in 2005.
In 2010, venture capital firm sold 10 per cent stake for more than Rs 160 crore, making a total return of nearly 7-8 times. The company sold the last of its stake to Capital International Emerging Markets Growth Fund and Capital International Emerging Markets Fund at Rs 1,550 a share, according to filings with stock exchanges in January 2011.
Sumitomo Corporation, which now bought a five per cent stake, had earlier signed an agreement with VA Tech Wabag in 2010. This alliance is expected to help the latter to expand more into concession type businesses, where the projects are capital intensive but provide annuity business and higher margins in the long run.
