Videocon exits Gayatri Proj mopping 5-fold returns
Videocon Group has made an exit from Hyderabad-based construction company, Gayatri Projects, with a five time return on its initial investment made in 1994.
The 19 lakh shares equivalent to 30% stake held by Videocon Appliances and Videocon Industries will be sold to the public, during an initial public offering (IPO) of 29 lakh shares in the price band of Rs 275 to 290 per share from September 26 to 29, Gayatri Projects said here today.
Videocon Group invested in Gayatri Projects at the rate of Rs 107 per share ten years ago and subsequently received two bonus issues making its actual buying cost Rs 48 per share, fetching it upward of Rs 52.5 crore.
Gayatri Projects is also raising between Rs 27.5 to Rs 29 crore by net sale of 10 lakh shares through this IPO, to fund the execution of the Meerut-Muzaffarnagar NHAI project, said Gayatri Projects’ MD of T V Sandeep Reddy, said here today.
Gayatri is currently executing road and irrigation projects worth Rs 1,111 crore in Andhra Pradesh, Madhya Pradesh, Chattisgarh and Gujarat and has projects worth Rs 1,350 crore through JVs.
The company’s revenue rose to Rs 371.18 crore in 2005-06 as compared from Rs 301.26 crore in the previous year and has been above Rs 300 crore in last few years.
Gayatri Projects in a pre-IPO placement has offloaded 15% stake – 9% to IL&FS Private Equity and 5-6% to another company, 2 i Capital, at the rate of Rs 275 per share.
The book running lead managers to the offer are Allianz Securities and IL&FS Investsmart.
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