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Mumbai: Rolex Rings Pvt. Ltd, an auto component maker, is in the process of appointing bankers to prepare for an initial public offering (IPO), said two bankers who have met the company for a mandate, asking not to be identified.

This is the fourth company in which Asia-focused private equity (PE) fund New Silk Route (NSR) has a significant investment that is considering a share sale this year. NSR will likely partially or entirely exit its investments in the companies.

Darius Pandole, partner at NSR, declined comment. Rolex Rings did not respond to phone calls or an email seeking comment.

In 2007, NSR invested $40 million (approximately 164 crore) to acquire 26% stake in Rolex Rings.

In September, Odisha-based Ortel Communications Ltd, in which NSR has a 33.58% stake, filed a draft red herring prospectus (DRHP) for an IPO with the market regulator. In December, Hubli-based VRL Logistics Ltd, in which it has 22.51% stake, followed suit. Coffee Day Enterprises Pvt. Ltd, the retail coffee chain of Cafe Coffee Day group promoted by V.G. Siddhartha, is also reported to be considering a share sale.

According to investment tracker VCCEdge, NSR has invested a total of 757 crore across these four transactions. NSR has invested close to $554 million to date in India, with its single-largest investment being Coffee Day.

NSR acquired a 33.58% in regional cable television and high-speed broadband services provider Ortel Communications in September 2008 for 60 crore and has offered to sell its entire stake in the firm, according to the latter’s draft prospectus.

In the case of VRL Logistics, the company has offered to offload part of its stake in the company by selling 14 million of the 19.2 million (22.51%) it owns in the company. NSR invested 175 crore in 2012 in the air freight and logistics company.

Coffee Day “plans to file its papers with Sebi by March this year to raise between 1,000 crore and 1,500 crore and NSR is looking for an exit", said one of the bankers directly involved in the process. Coffee Day didn’t respond to phone calls or an email seeking comment.

NSR, along with two other private equity firms, KKR & Co. and Standard Chartered, together hold some 30% stake in Coffee Day group companies.

In December, NSR partially exited its investment in financial services company Destimoney Services Pvt. Ltd to global private equity firm Carlyle Group for an undisclosed sum. The fund has not publicly disclosed the sale. Mint reported the development on 2 December. NSR invested 200 crore in the company in 2008. In September 2013, Mint reported the firm had initiated discussions to exit its investment in 9X Media Pvt. Ltd.

NSR was founded in 2006 and has $1.4 billion under management, mainly in India and emerging economies in Asia and West Asia. It has 17 publicly disclosed investments on its website. It did not make any investments in 2014. Its last investment was on September 2013, when it acquired Mumbai-based chain of restaurants Moshes Fine Foods Pvt. Ltd through its portfolio company called South Asia Gastronomy Enterprises Llc.

The fund has investments in consumer services, education, manufacturing and engineering, financial services, telecommunications and technology and infrastructure.

Most PE companies are now negotiating exits with the market looking up, said an expert.

“We have seen higher exit activity since 2013 and, as of now, a number of funds are looking to exit their prior investments—2013 mostly saw secondary sales and a few strategic sales. With the capital markets opening up, IPOs too have become an available exit route," said Sanjeev Krishan, partner and leader for private equity and transaction services at PricewaterhouseCoopers India Pvt. Ltd.

“The strategic investors have still not returned to India, and when they come back, strategic sales would possibly be the most sought-after exit mechanism," Krishan said. “The important question is in terms of returns— how much have these funds been able to return to their investors. While there have been a few exceptions, on an overall basis, the returns have not been at desired level," Krishan added.

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