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Multiples PE, Aditya Birla PE sold IEX shares just ahead of IPO launch

Multiples PE founder and MD Renuka Ramnath. Investors selling shares, in private transactions, just before the opening of an IPO is a rare event. Photo: Abhijit Bhatlekar/Mint (Abhijit Bhatlekar/Mint)Premium
Multiples PE founder and MD Renuka Ramnath. Investors selling shares, in private transactions, just before the opening of an IPO is a rare event. Photo: Abhijit Bhatlekar/Mint (Abhijit Bhatlekar/Mint)

Aditya Birla Private Equity and Multiples PE sold Indian Energy Exchange shares worth Rs103 crore in private transactions just a couple of days before the IEX IPO

Mumbai: Private equity investors Aditya Birla Private Equity and Renuka Ramnath-led Multiples Alternate Asset Management (Multiples PE) sold Indian Energy Exchange Ltd (IEX) shares worth Rs103 crore in private transactions, just a couple of days ahead of the launch of the firm’s initial public offering.

Generally, companies and existing investors looking to sell shares ahead of an IPO do so before filing of the red-herring prospectus (RHP) with the regulators, in what are known as pre-IPO rounds. Investors selling shares, in private transactions, just before opening of the IPO is a rare event.

The initial share sale of power exchange IEX opened on 9 October. As of closing on the last day of the public offering on Wednesday, the IPO was subscribed 2.23 times. The company has priced its shares in the range of Rs1,645-1,650 apiece.

According to a corrigendum filed by the company, Aditya Birla PE sold shares worth Rs74.93 crore to SBI Life Insurance Co. Ltd on 6 October, while Multiples PE, on 7 October “entered into letter agreements for transfer" of shares worth Rs28 crore to a clutch of high net-worth individuals.

Aditya Birla PE sold shares at a price of Rs1,582.6, while Multiples PE has entered share sale agreements at Rs1,617 per share. The shares will be subject to one-year lock-in period.

“These equity shares do not form part of the equity shares proposed to be offered by the said selling shareholders as part of the offer for sale, in the offer," the corrigendum added. The share sales by Aditya Birla and Multiples correspond to 1.6% and 0.57% stake sales, respectively.

The two private equity investors are also selling shares in the IPO, which is a pure offer for sale, by existing investors of the company.

According to the RHP filed by the company, Aditya Birla is selling shares worth Rs84 crore, while Multiples is selling shares worth Rs450 crore.

Other investors that are selling shares in the IPO include Tata Power Co. Ltd, which plans to fully exit the company, venture capital firm Light Speed Ventures and PE fund Madison India Capital.

At the upper end of the price band, the selling shareholders will collectively raise Rs1,000 crore from the IPO.

The share sale values the company at Rs5,000 crore.

For the year ended 31 March, IEX reported a revenue of Rs237.4 crore, as compared to a revenue of Rs200.1 crore in the previous financial year. The company reported a profit of Rs113.6 crore in 2016-17, up 13% from a year ago.

IEX will be the second bourse to go public. India’s largest commodity exchange Multi Commodity Exchange of India Ltd went public in 2012.

IEX provides electronic trading of a range of electricity products such as electricity contracts in blocks of 15 minutes in the day-ahead market, electricity contracts for fixed terms in the future, and renewable energy certificates. The power exchange expects to commence trading of energy-saving certificates in financial year 2018.

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