IDFC Alternatives, one of the largest multi-asset class fund managers, with over $3.4 billion under management, has concluded a partial exit in its private equity fund (IDFC PE) with the IPO of Parag Milk Foods.
IDFC PE had invested Rs 155 crore in Parag three years ago and is expected to receive over Rs 180 crores for its shares tendered in the Offer for Sale. This will result in a cash multiple of 2x and an IRR or internal rate of returns of 21%. Post listing, IDFC PE will continue to hold a 7% stake in Parag. The stock closed the day at Rs 248 per share, 15% above its allotment price and resulting in listing gains of over 22% on day one to retail investors.
“We are extremely pleased with the 2.5x growth of the company since our investment and continue to hold a significant amount of our investment as we believe in the long term prospects of the company," says Girish Nadkarni, Partner, IDFC Alternatives – Private Equity, in a statement.
With this IPO, IDFC PE has concluded 27 exits out of 41 investments made so far. In the last 12 months alone, IDFC PE has concluded four exits realising Rs 942 crores at a 2x-4x multiple of cost (MOC). Apart from Parag Milk Foods, these include the sale of controlling stakes in Green Infra and Viom Networks to international strategic investors Sembcorp and American Tower respectively; a complete exit in Maharashtra Natural Gas (MNGL) and a partial exit in Staragri to Temasek.
Overall, since inception IDFC PE has realised over $850 million from its 27 exits. Exits are sore point for the private equity industry in India with investors sometimes waiting for over eight years to realise returns.