American private equity firm Warburg Pincus sells 4.08 per cent of its 7.45 per cent stake in Auto component firm Amtek India Ltd

Warbug Pincus announced it had disposed off about 4.08 per cent of its 7.45 per cent stake in Indian firm Amtek India Ltd. Warbug reiterated it had sold the stake in the Indian auto component manufacturer for an estimated Rs 35.73 crore. However, Warbug incurred a loss of 60 per cent on this investment. Warbug Pincus sold 5.5 million shares for about Rs 64.96 for every share on the Bombay Stock Exchange via a bulk deal agreement.

Warbug Pincus bought 9.49 per cent stake - 10,038,991 shares, in Amtek India in the third quarter of 2006-07 for around 175-210 Indian rupees per share, putting around Rs.200 crore.  Due to change in equity base, its shareholding came down to 7.45 per cent.

In May 2010, Amtek India’s flagship group firm Amtek Auto acquired a 26.3 per cent stake in Amtek India from the promoters for Rs.215 crore to consolidate business under one flagship company.  Amtek Auto bought 26.3 per cent stake in Amtek India at an average price of Rs 64.8 a share.

The deal was the part of an agreement where Amtek Auto agreed to buy a 40.2 per cent stake owned by the promoters in Amtek India at a price not exceeding 68 Indian rupees a share.  Amtek Auto’s open offer to acquire an additional 20 per cent stake or 2.5 crore shares of Amtek India is still pending that would give it majority stake and allow it to consolidate the earnings of Amtek India with itself.

Other than Warburg Pincus, ChrysCapital also holds 8.17 per cent stake in Amtek India as of September 30, 2010. Warburg Pincus and ChrysCapital also hold stake in Amtek Auto. Warburg holds 5.78 per cent, while ChrysCapital holds 6.72 per cent in Amtek Auto as on September 30, 2010.

Warburg Pincus, LLC is an American private equity firm with offices in the United States, Europe, and Asia. The firm currently has approximately $25 billion in assets under management and invests in a range of sectors including consumer, energy, financial services, health care, industrial, media, technology, telecommunication and real estate.

Warburg Pincus is a growth investor and its active portfolio of more than 100 companies is highly diversified by stage, sector and geography.

Amtek India or Amtek India Ltd is an India based automotive components manufacturer. Amtek India belongs to the leading auto component manufacturer – the Amtek Group and was established in 1985.

22 Nov 2010.