Blackstone-backed Nagarjuna raises INR3.7bn from investors

The Indian construction services company’s new issue was oversubscribed 1.8 times by institutional investors.

Nagarjuna Construction Company has raised about INR 3.7 billion ($76 million; €53 million) from investors in a qualified institutional placement.
The issue was oversubscribed 1.8 times as the construction services company received bids from 25 investors totalling approximately INR6.7 billion, according to a Nagarjuna statement. After the placement, the new issue represents a roughly 11 percent stake in the company.

US buyout firm The Blackstone Group, which invested $150 million in Nagarjuna in 2007, sees its stake reduced to 8.32 percent to 9.68 percent after the placement. At the time, Blackstone invested $100 million in shares and $50 million through warrants in the company. The firm also has a seat on its board.

Each share was issued at INR132.46. Currently, Nagarjuna is trading on the Bombay Stock Exchange at INR142.20 at press time. 

The capital will be used to finance the company’s build, operate and transfer as well as its build, own, operate and transfer projects in sectors such as roads and power.  It will also be used for working capital and to pay down its short term debt, the company said. Nagarjuna has about INR26.8 billion in total debt at the end of March.

Headquartered in Hyderabad, Nagarjuna operates across India’s construction industry including road, water, electricity, power, oil and gas projects. The company booked a net profit of INR1.8 billion in the year ending 31 March, up from a net profit of about INR1.7 billion in the previous year.