Blackstone to up Nagarjuna Construction stake to 12.2%

US-based private equity firm Blackstone is all set to raise its stake in Nagarjuna Construction from existing 9% to 12.2%. The company has got the Foreign Investment Promotion Board (FIPB) clearance for investing in the Hyderabad-based infrastructure firm.Blackstone had bought 9% stake in Nagarjuna Construction in July 2007. The Hyderabad-based company raised $180 million (Rs 730 crore) through the sale of fresh shares to financial institutions.

In March 2007, the company had informed BSE that it would be doing a placement to institutional shareholders at a premium of Rs 215 per share of Rs 2 paid-up value. The company had simultaneously taken the approval of shareholders for an issue of 25 lakh warrants to an investment company, AVSR Holdings, belonging to the promoters, also at the same price of Rs 217.

At the end of March 2007, the foreign fund holding in the company stood at 30.2%. The promoters hold 24.5% stake in the company. Nagarjuna Construction announced that it has secured three new orders aggregating Rs 424 crore. All these projects which include a Rs 266-crore order to construct a sewage system in Indore, are likely to be completed in the next 36 months.

Read more in The Economic Times article.

Blackstone to buy stake in Nagarjuna Const

Private equity investor Blackstone is in talks to pick up stake in the Hyderabad-based Nagarjuna Constructions.Sources close to the development said the Rs 2,871 crore firm plans to raise up to $180 million (Rs 730 crore) through the sale of fresh shares to a few financial institutions including Blackstone.

They added that the deal would take place at a premium to the ruling market price of Rs 202, which was the closing price on the BSE on Tuesday. Nagarjuna Constructions declined to comment on the matter. Blackstone CEO said the company did not comment on speculation.

The proposed issue of fresh shares follows the company’s plan to raise funds through the qualified institutional placement (QIP) route, for which Nagarjuna had received shareholder’s approval earlier this year.

In March 2007, the company had informed the BSE that it would be doing a placement to institutional shareholders at a premium of Rs 215 per share of Rs 2 paid-up value.However, the placement did not take place possibly because the company’s stock price took a sharp dip subsequently, falling from Rs 220 levels in January to less than Rs 150 in April. The stock price recovered only in July to around Rs 188 and further to around Rs 200.

The company had simultaneously taken the approval of shareholders for an issue of 25 lakh warrants to an investment company, AVSR Holdings, belonging to the promoters, also at the same price of Rs 217.

Read more in The Business Standard article.