The Hindu Business Line : AIG arm reaps huge profit from Biocon stock sale

WITHIN a few months of acquiring the shares of Biocon, AOF HS Mauritius (AOF), a wholly owned subsidiary of AIG Opportunity Fund, has made a killing by selling over 48 lakh shares of the company in the open market.

AOF sold 48.3 lakh shares (4.8 per cent of the company's equity) in the open market at Rs 605.70-608.50 on the BSE on Tuesday. The total value of the transaction was around Rs 293 crore.

Even though the exact profit made by AOF HF is not known, it is over Rs 150 crore for the entire transaction. AOF Officials were not available for comment.

The Biocon stock was listed on the BSE a week back. On Tuesday, it closed at Rs 622.40, down 10.41 per cent.

AOF acquired the shares from ICICI Ventures along with its affiliate funds during the May-September 2003 period.

The Biocon spokesperson also refused to comment beyond stating: "Since the shares were bought by AOF HF through secondary transaction and the company was not involved, the exact price at which AOF bought the shares is not known."

AOF HF was one of the largest shareholders in the company holding nine per cent stake (90 lakh shares) before the IPO. After this transaction, its holding will decline to 4.2 per cent.

The shares in the secondary market were mainly bought by Goldman Sachs Investment Mauritius (34.66 lakh shares at Rs 605).

Other buyers include HSBC Mutual Fund (4.5 lakh shares at Rs 605) and Emerging Markets (7.53 lakh shares at Rs 605).

Last month, Biocon had come out with an IPO of one crore shares at Rs 315 per share.

The issue received good response and was oversubscribed 32 times.

On listing too, the stock has been one of the most actively traded counters, having given returns of almost 100 per cent on the issue price within just a few days of listing.

Brokers said that there has been good demand for the company's shares among institutional investors. Those investors who did not get shares during the IPO are now actively seeking them.

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