BackStanChart PE buys minority stake in Ocean Sparkle for `200 crore
Ocean Sparkle Ltd has the largest tug fleet in India and has international operations in Oman and Sri Lanka.
Premium(Philippe Lopez/AFP )
Mumbai: Standard Chartered Private Equity Ltd (SCPE), the PE arm of Standard Charted Bank, has bought a minority stake in Hyderabad-based port operations and management company Ocean Sparkle Ltd (OSL) for ₹ 200 crore.
“The country’s growing economy and growth in maritime traffic will provide a strong impetus for the growth of port infrastructure over the next decade. This will provide strong prospects for O&M (operation and maintenance) activities at ports," SCPE managing director Rahul Raisurana said in a statement.
The investment was driven by OSL being the market leader in the sector and, with its large tug fleet, was “well positioned" to capitalize on the outsourcing trend as well as tug replacement demand at ports, said Raisurana, who will join the company’s board. MAPE Advisory Group was adviser to the deal.
Ocean Sparkle counts India’s biggest state-run and private sector ports among its clients.
The company is seeking to tap opportunities in the energy and offshore terminal space. Mint reported in October 2012 that the Hyderabad-based company was in advanced talks with a global private equity company to raise ₹ 200 crore.
OSL has the largest tug fleet in India and has international operations in Oman and Sri Lanka.
The company is also pre-qualified to operate in more than five countries and offers a suite of services including harbour towage, pilotage, mooring, ship-to-ship operations, salvage assistance, control tower operation and dredging.
Apart from operating 10-13 major ports in the country, the company is also exploring opportunities in the energy terminal and offshore terminal space.
Sector analysts expect the port sector to grow 10-15% annually for the next decade.
SCPE has invested in OSL through its mid-market fund, which also invested in the ₹ 130 crore Karaikal Port Pvt. Ltd in June.
The mid-market fund typically looks at an investment period of three-five years. SCPE recently exited its investment in PI Industries, an agri-input firm, with a return of 4.5x.
There is strong potential for port services in India and getting a private equity investor means a clear-cut, long-term strategy, said a senior analyst who tracks the sector, requesting anonymity.
“Ocean Sparkle was looking to raise money for a long time. It is not clear how they will use the proceeds, but the company can utilize the funds for diversification of its fleet and going ahead with its pending acquisition programme," he said.
“We feel privileged to partner with Standard Chartered Private Equity in our endeavour to accelerate our growth in various marine services across ports in India," P. Jairaj Kumar, chairman and managing director of Ocean Sparkle, said in a statement.
P.R. Sanjai contributed to the story.
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