Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.
11,895.4523.35
Stock Analysis, IPO, Mutual Funds, Bonds & More

TVS Capital buys 3% stake in IEX from Bessemer Venture for Rs 75 crore

When contacted, Vishal Gupta, managing director, Bessemer Venture Partners India, confirmed the sale of stake in IEX to TVS Capital.

Updated: Sep 11, 2015, 05.58 AM IST
0Comments
When contacted, Vishal Gupta, managing director, Bessemer Venture Partners India, confirmed the sale of stake in IEX to TVS Capital.
When contacted, Vishal Gupta, managing director, Bessemer Venture Partners India, confirmed the sale of stake in IEX to TVS Capital.
MUMBAI: Even as the Multiples PEled consortium is trying to buy a 24% stake in Indian Energy Exchange from Jignesh Shah’s Financial Technologies, TVS Capital has bought 3% stake from Bessemer Venture Partners for Rs 75 crore, valuing the company at Rs 2,500 crore. Bessemer will make seven times returns on the investment with this exit, said three people directly involved in the deal.

TVS Capital, that was part of the consortium with Multiples to purchase 24% stake in India’s largest electricity exchange by volume, went ahead and bought the stake from Bessemer Venture Partners which had invested in the company in 2010. The company was valued at Rs 350 crore at that time.

“Bessemer has made around seven times returns on its investments in IEX,” one of the persons involved said. Bessemer, along with Lightspeed Venture Partners, had acquired stake from PTC Financial Services for Rs 70 crore. Bessemer continues to hold around 6% in the company.

TVS Capital buys 3% stake in IEX from Bessemer Venture for Rs 75 croreWhen contacted, Vishal Gupta, managing director, Bessemer Venture Partners India, confirmed the sale of stake in IEX to TVS Capital. Gupta will continue to be a director on the board of IEX even post the transaction. Some of the other investors in the company include Aditya Birla PE, Multiples Private Equity Fund, Adani Enterprises, Jindal Power, Lanco Infra, Reliance Infra, Rural Electrification Corporation, Tata Power and lender IDFC. PTC continues to hold around 5% stake in the company. Former Aditya Birla PE chief executive Bharat Banka acted as the sole advisor to the deal. After quitting Aditya Birla PE, Banka is advising various business houses, funds and startups.

With a shareholding cap of 5% imposed by the regulator for all power generators in energy exchanges, non-energy investors are keen to invest in such entities. According to rules, domestic commodity exchanges, stock exchanges, depositories, banks, insurance companies or public financial institutions can hold as much as 15% of the paidup capital of a commodity exchange.

Jignesh Shah-led Financial Technologies (India), one of the major shareholders of IEX, has been asked to divest up to 24.8% stake in the company after regulators declared it unfit to run an exchange following irregularities in operations that led to a Rs 5,574-crore payment crisis at the National Spot Exchange Ltd, a group entity, in 2013.

“The current valuation will now become the new benchmark for all future deals and the existing shareholders believe there is more value yet to be explored in the company,” said another person involved in the deal.

With the nation’s power sector poised for expansion, IEX’s prospects and valuation are set to improve. Many entities increasingly prefer to buy electricity on exchanges instead of entering into long-term purchase agreements with producers.

Also Read

Average spot power price drops 54% to two-year low at IEX

Average monthly power price at IEX touches two-year low

Power demand at IEX falls 26% in the last eight days

Power trading volumes rise 27% in July at IEX

Buzzing stocks: IEX, YES Bank, Vodafone Idea, SBI

Comments
Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.

Other useful Links


Follow us on


Download et app


Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service