India 2020 Limited, a $125-million mid-market fund managed by Lighthouse Funds, is picking up a stake in BSE-listed Dhanuka Agritech for Rs 33.9 crore. Dhanuka, involved in the businesses of agro-chemicals & seeds, will allot 8,25,000 shares of Rs 411 each to 2020 Equity Investors Ltd, a subsidiary of India 2020, as per BSE filings.
The shares could amount to around 8.25% stake on a post dilution basis. The board of Dhanuka has approved the preferential allotment and has called for an extra ordinary general meeting (EGM) on August 30.
Dhanuka reported revenues of Rs 407 crore and a net profit of Rs 36.4 crore in FY10 as compared to revenues of Rs 336 crore with net profit of Rs 23.2 crore in FY09. The promoters of the firm hold around a 90% stake in Dhanuka Agritech, which will go down after the fundraise. Dhanuka Group is also present in pharmaceutical ingredients through Dhanuka Laboratories Limited.
The share prices of New Delhi-based Dhanuka closed at Rs 44.1, down by less than 1%. Dhanuka Agritech also splitting its shares from one share of Rs 10 each to five shares of Rs 2 each.
Dhanuka Agritech has a distribution network through 27 branch offices, 1,000 plus techno-commercial staff and 15,000 dealers. It has four manufacturing facilities at Gurgaon and Sohna in Haryana, Sanand in Gujarat and Udhampur in J&K for formulation of various grades of pesticides, fungicides, miticides, weedicides, plant growth stimulants, plant growth regulators, foliar fertilizers and sticking agents. It also has two seed processing units at Mandideep in M.P. and Turkapalli (Hyderabad) in Andhra Pradesh.
There have been several private equity deals in the seeds space in the last two years. US-based Summit Partners made its debut in India with a $30-million investment in Krishidhan Seeds Ltd (KSL), a commercial seeds manufacturer, earlier this year. Blackstone invested about $80 million for less than 25% stake in India largest hybrid seeds company Nuziveedu Seeds Ltd in December 2008.
Lighthouse Funds has invested in companies like housekeeping services and facilities management player Radiant Hospitality; auto component firm Arihant and liquor firm Imperial Spirits.
Transwarranty Finance Limited acted as the advisors to this transaction.
(As published in Vc Circle Mon, August 9, 2010)