Apax scores two exits from Indian portfolio

London-headquartered Apax Partners has sold its remaining interest in non-banking financial institution Cholamandalam Investment and Finance Company, three years after acquiring a more than 10 percent stake in the company.

Apax completed the sale of its 3.5 percent shareholding in the Chennai-based company for INR 5.3 billion ($77 million; €72 million), according to a National Stock Exchange of India filing.

Apax invested in Cholamandalam via three tranches – an initial commitment of about $5 million in March 2014 through its Apax Global Alpha fund; an additional $84 million in July of the same year through 2012-vintage $7.5 billion Apax VIII; and a further $20 million in August from Apax VIII, when it bought the International Finance Corporation’s 2 percent shareholding.

The sale marks the firm’s final exit from Cholamandalam among several rounds of stake dilution carried out last year.

In September Apax sold around 40 percent of its stake in the business for $102 million via a block deal on India’s NSE. It sold another block of shares in December.

It is understood the sale will deliver a return of 2.5x in rupees to investors in the $7.5 billion Apax VIII.

Under Apax’s ownership Cholamandalam expanded into new areas of business including small and medium enterprise finance, home lands and agri loans. The firm has also made digital enhancements to its products and services using data and analytics, as previously reported by Private Equity International.

A week prior to Apax’s exit from Cholamandalam, the firm also sold half of its 96 percent stake in digital services company GlobalLogic to the Canada Pension Plan Investment Board for an undisclosed sum.

The partial exit would generate investor returns north of 3x, a source with knowledge of the matter told PEI.

Apax bought the company in 2013 via Apax VIII. Under its ownership, the firm made significant improvements upgrading GlobalLogic’s management team, building differentiated capabilities and enhancing its digital offerings, Apax said in a statement. The company also recorded a compound annual growth rate of upwards of 20 percent consistently outperforming the broader product engineering services market.

Apax is an active investor in India’s tech and healthcare sectors and is understood to have deployed around $1.5 billion in the country over the past ten years.

Commenting on the recent exits Shashank Singh, Apax Partners’ head of India told PEI: “Across completed exits from Chennai-based speciality hospital chain Apollo Hospitals, IT services company IGATE and Cholamandalam, as well as the partial exit from GlobalLogic, funds advised by Apax Partners would have returned over $2.5 billion to investors.”

Apax which manages over $48 billion of assets globally, mainly invests in four sectors: tech & telco, services, healthcare, and consumer.

In December last year Apax also held a final close on its ninth global buyout vehicle Apax IX on its $9 billion hard-cap.