Multiples PE, Aditya Birla PE sold IEX shares just ahead of its IPO launch

MUMBAI: Private equity investors Aditya Birla Private Equity and Renuka Ramnath-led Multiples Alternate Asset Management (Multiples PE) sold Indian Energy Exchange Ltd (IEX) shares worth ₹103 crore in private transactions, just days ahead of the launch of the company’s initial public offering (IPO).

Generally, companies and existing investors looking to sell shares ahead of an IPO do so before filing of the red-herring prospectus (RHP) with the regulators, in what are known as pre-IPO rounds. Investors selling shares, in private transactions, just before opening of the IPO is a rare event.

The initial share sale of power exchange IEX opened on 9 October. As of closing of the second day of the public offering, the IEX IPO was subscribed 43%. The company has priced its shares in the range of ₹1,645-1,650 apiece. The offering closes on October 11.

According to a corrigendum filed by the company, Aditya Birla PE sold shares worth ₹74.93 crore to SBI Life Insurance Co Ltd on October 6, while Multiples PE, on October 7 “entered into letter agreements for transfer” of shares worth ₹28 crore to a clutch of high net-worth individuals.

Aditya Birla PE sold shares at a price of ₹1,582.6, while the Multiples PE has entered the share sale agreements at ₹1,617 per share. The shares will be subject to a one-year lock-in period.

“These equity shares do not form part of the equity shares proposed to be offered by the said selling shareholders as a part of the offer for sale in the offer,” the corrigendum added. The share sales by Aditya Birla and Multiples correspond to 1.6% and 0.57% stake sales, respectively.

The two private equity investors are also selling shares in the IPO, which is a pure offer for sale, by existing investors of the company.

According to the RHP filed by the company, Aditya Birla is selling shares worth ₹84 crore, while Multiples is selling shares worth ₹450 crore. Other investors that are selling shares in the IPO include Tata Power Co Ltd, which plans to fully exit the company, venture capital firm Light Speed Ventures and PE fund Madison India Capital.

At the upper end of the price band, the selling shareholders will raise ₹1,000 crore from the IPO. The share sale values the company at ₹5,000 crore.

For the financial year ended March 31, 2017, IEX reported a revenue of ₹237.4 crore, as compared to a revenue of ₹200.1 crore in the previous fiscal. The firm reported a profit of ₹113.6 crore in 2016-17, up 13% from a year ago.

IEX will be the second bourse to go public. India’s largest commodity exchange Multi Commodity Exchange of India Ltd went public in 2012.

IEX provides electronic trading of a range of electricity products. It expects to commence trading of energy-saving certificates in financial year 2018.