In the last five months, Baring Private Equity Partners India increased its shareholding, in tranches, in the gold loan firm Manappuram Finance by 2.3 per cent.
for around Rs 45-50 crore.
Following this, the PE firm holds 9.48 per cent stake in the gold loan company, the fund said in a communication to the stock exchange.
The share price of Manappuram declined around 50 percent in the last five months. The gradual increase in stake by the PE firm is intended to reduce its average cost of share acquisition in the financial services firm. It may be noted that the PE firm started investing when the share price was much higher.
The additional shares were bought by the PE firm through its Baring India Private Equity Fund III Listed Investments and Baring India Private Equity Fund II.
Last year, Baring PE India hiked its stake to 7.18 per cent by acquiring an additional 1.23 per cent stake. It started buying into the firm in late 2011, starting with 1.4 per cent stake for $10.87 million.
Based on the current share price, the value of the PE firmÂ’s investment in the public-listed company would be underwater.