Ambit Pragma Ventures Pvt. Ltd, the private equity arm of Ambit Holdings Pvt. Ltd is set to sell Prasanna Purple Mobility Solutions Pvt. Ltd, a Pune-based bus operating company in which it holds about 70% stake.
Ambit Pragma has hired advisory firm EY to run the sale process, according to two people aware of the development. Discussions are on with several global logistics players and the company may be valued at Rs300 crore, the first person said on condition of anonymity.
Prasanna Purple is run by a third generation entrepreneur Prasanna Patwardhan who took over the business from his father in 1986. The promoter will also sell the remaining stake in the proposed transaction, added the second person.
The company provides services such as city and intercity buses, bus and car rentals, employee mobility and school bus services, and individual and group tours. At present, Purple operates over 1,200 vehicles of different categories and carries 240 million passengers by city buses and 1.5 million in intercity buses per annum, according to the company website. It operates in the cities of Ahmedabad, Bhopal, Delhi, Indore and Pune among others.
“Ambit Pragma has mandated EY to find a strategic investor for Prasanna Purple. The promoter, Prasanna Patwardhan, and Ambit Pragma believe that the company now has a robust diversified business in people transportation segment, and will benefit from the participation of a strategic player who can add to business capabilities. In the process, Ambit Pragma shall also divest its shareholding to the strategic buyer,” said an Ambit Holdings spokesperson.
An email sent to Prasanna Patwardhan, chairman and managing director of Prasanna Purple, had not elicited any response until the time of going to press. An EY spokesperson declined to comment.
According to filings with the registrar of companies (RoC), Prasanna Purple reported revenue of Rs173.5 crore for the financial year ended 31 March 2016, as compared with revenue of Rs144.5 crore in the previous year. In 2015-16, it reported a profit of Rs1 crore, as against a profit of Rs33 lakh in the previous financial year, data shows.
“We are currently engaged with numerous global strategic buyers and anticipate to shortlist possible buyers in the next couple of months. We do believe that buyers will have a great appreciation for the strongly diversified services portfolio and the high corporate governance standard that the company maintains,” the Ambit spokesperson added.
Ambit Pragma acquired a minority stake in Purple in 2009, gradually increasing it to a majority over five years. Ambit Pragma had offloaded its controlling stake in another Pune-based logistics firm Spear Logistics Pvt. Ltd in March last year, to international logistics provider FM Logistic.
“Domestic passenger traffic is growing rapidly across all modes of travel. This is also accentuated by recent policies around regional air connectivity, ramp up of road infrastructure, and riverine and coastal transport development. The industry hence is poised to attract investment over a longer period of time,” said Jaideep Ghosh, partner, and head, transport and logistics, KPMG.
At present, Ambit Pragma manages its $150 million second fund called Ambit Pragma Fund II that it raised in 2013.
In its latest investment, Ambit Pragma acquired a minority stake in Bengaluru-based health management and wellness company Vidal Healthcare Services Pvt. Ltd for $10 million in September last year.
Besides Purple, Ambit Pragma’s portfolio includes film and advertising production services firm MAD Studios Pvt. Ltd, Kelvin Cold Chain Logistics Pvt. Ltd, entertainment company Teamwork Arts and media technology and services firm Prime Focus Technologies.
Source: Mint