Citi arm picks 7% equity in Delhi firm

Deal inked for Rs 45cr; fund buys 13.6mn shares in block deals.

Citigroup's private equity arm on Tuesday picked up a 7 per cent stake in Abhishek Industries, a Delhi-based textiles company.

The deal was struck at approximately $11 million (Rs 45 crore), with the fund buying 13.6 million shares in a block deal executed on the Bombay Stock Exchange (BSE). The promoters sold equity in the company.

The stock's price surged 8.92 per cent to Rs 35.40, with volumes accounting for more than 14.5 million shares on the BSE. The stock trades in the trade-to-trade segment on the BSE. ICICI Securities was the sole advisor to the deal.

When contacted, Amrish Baliga, the vice-president who looks after private equity at ICICI Securities, confirmed the development and said, "It's a uniquely structured deal which gives Citigroup an entry into India's fastest growing textile sector. The transaction is a win-win proposition for both the company as well as for the fund."

Textiles contribute close to 74 per cent of the company's business, with paper contributing the rest. It is the largest producer of terry towels in India and has MNC clients.

For the quarter ended December 2004, the firm reported dismal results. Its net profit plunged 60.4 per cent to Rs 4.43 crore from Rs 11.20 crore. Net sales rose 15 per cent to Rs 136.25 crore.