Ahmedabad: Gujarat-based companies seem to warm up to private equity investment (PE) with more promoters Gujarati, which is usually more banks in the initial public offering (IPO) to raise funds, now also striking from the players.
For example, Global PE Major KKR last month announced an investment of Rs 4,600 Crore for controlling stocks in Cosmetics Vini, Deodorant brand maker based in Ahmedabad.
The city-based pharmaceutical company LA Renon and Contract Research Organizations (CRO) Veeda Clinical has collected Rs 220 Crore ($ 30 million) and RS118 Crore ($ 16 million) each from PE investors this year.
While the Personal Equity Firm of Homegrown Chryscapital obtained 27% in Corona Personal Medicine Ltd.
for an undexpressed amount, JM Private Finance Equity is pumped in Hospital 60 Crore at the Canpac Trends Pvt Ltd, a company solution solution and folding packaging from Ahmedabad.
Many PE offers in Gujarat involved additional direct sales to this agreement, a consortium led by the PE company supported alternative asset management purchased by Zydus Cadila Animal Health Business in India for RS 2,921 Crore on May 2021.
In other purchases, Bain Capital Private Company owned by equity, pharmaceutical acceptable in February acquired astral steritech Pvt based in Vadodara, which specializes in manufacturing sterile antibiotic injection formulations, people said in knowledge.
“The majority of promoters in Gujarat prefer to increase capital through the initial public offering (IPO) rather than inviting private equity investments.
This is because PE investment is not a ‘easy capital’ and comes with many strings installed,” said Rajeev Shah, MD & CEO, advisor RBSA, a Ahmedabad-based transaction advisory company.
“Trends, however, slowly changed with several Gujarat-based promoters raising funds from private equity players.
However, Gujarat was left behind Bengaluru, Pune, NCR and Mumbai, where many PE agreements occurred in a new technology company,” he added.
Many PE deals in Gujarat involve direct selling by promoters, several other companies have increased capital for future growth.
“A number of private equity transactions have been hit in health, pharmaceutical, chemicals, and special chemical companies.
Private equity investors are interested in such companies because they witnessed the recovery of Vshape faster and benefited from the transfer of orders from China after the Covid-19 outbreak,” said Ca Sanjeev Shah from Sanjeev Shah and Associates based in Vadodara, which is a boutique investment banking company.
“Pandemic triggers the growth of the pharmaceutical sector, which in turn causes the growth of pharmaceutical sectors such as chemicals, special chemicals and pharmaceutical intermediaries.
With incoming growth and profitability, some promoters approach private equity investors and others crash into the primary market by launching public offices Prime, “Shah added.