Financial Daily from THE HINDU group of publications
Monday, Feb 11, 2002
Mergers & Acquisitions
Corporate - Mergers & Acquisitions
Info-Tech - Venture Capital
ChrysCapital buys 5 pc stake in NIIT -- Seeks FIPB nod for 10 pc more
MUMBAI, Feb. 10
CHRYSCAPITAL, the venture capital (VC) firm previously known as Chrysalis Capital, has acquired close to five per cent stake in NIIT Ltd, a software and computer education company, through the secondary market and plans to hike the stake further up to 15 per cent.
According to sources close to the development, the total cost of acquisition of this stake would be around Rs 30-32 crore.
In order to increase its stake up to 15 per cent, ChrysCapital has sought approval of the Foreign Investment Promotion Board (FIPB). "However, the VC plans to keep its stake below the 15-per cent mark in order to avoid making an open offer," sources added.
When contacted by Business Line, an NIIT official confirmed that ChrysCapital had picked up stake in the company and that it was currently just under five per cent. The total paid-up capital of the company is Rs 38.64 crore.
ChrysCapital bought these shares from the secondary market over the past three to four months. During the same period, promoters of NIIT also increased their stake through the creeping acquisition route. In the third quarter, i.e., between October and December 2001, the promoters' stake increased by 3.9 per cent from 34.53 to 38.43 per cent.
On the back of buying by both these parties, NIIT's share price doubled during this period. From around Rs 100 at the beginning of October, it crossed the Rs 200 mark. On Friday, the scrip closed at Rs 228.40 on the Bombay Stock Exchange.
As of December 31, 2001, promoters' holding in NIIT stood at 38.43 per cent; mutual funds including UTI at 6.27 per cent (down from 10.1 per cent at the end of September 2001); banks and FIs at 2.15 per cent; FIIs at 33.45 per cent; private corporate bodies held 4.52 per cent; public 13.85 per cent; NRIs/OCBs 0.35 per cent while 0.97 per cent shares were in transit. NIIT is the second IT company whose shares ChrysCapital has bought through the secondary market. During the same period (October-December 2001), it had acquired around seven per cent stake in Mphasis BFL Software, taking its total stake in the company to around 14.5 per cent.
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