Clearwater Capital exits vehicle parts maker Jamna Auto

During its investment in Jamna Auto Industries, Clearwater helped the company reduce its debt, consolidate its market position and rebuild its distribution business to increase margins.

Clearwater Capital Partners has exited its remaining stake in commercial vehicle parts maker Jamna Auto Industries, in which it held almost 29 percent.

The realisation of Clearwater’s investment made initially in 2006 with equity and debt tranchers, is believed to have generated a more than 2x return on money for the firm, excluding leverage.

Clearwater Capital recapitalised Jamna Auto to the tune of $46 million in 2006 through Clearwater Capital Partners (Cyprus) and Clearwater Capital Partners Singapore Fund III, Clearwater’s Mumbai-based director Karthik Athreya told Private Equity International.

Jamna, which is India’s largest manufacturer of tapered leaf and parabolic springs for heavy commercial vehicles, repaid the entire debt earlier from its operational turnaround, Athreya said.

The investment from Clearwater Capital enabled the company to resolve its debt overhang, solve working capital issues, rebuild its distribution business to increase its margins, create a world-class manufacturing capacity and improve corporate governance by merging its promoter entities, Athreya said.

“The company performed so well over the years and withstood several economic cycles both in India macro [economy] as well as the underlying commercial vehicles space, which is a proxy for Jamna's markets, that multiples and investment outlook in the company became positive over the past year,” Athreya said.

As of 30 September 2015, the company reported total income from operations at about INR. 3 billion ($45 million; €41 million)

Asia-focused Clearwater Capital has been exiting several of its equity investments in the past year including electrical equipment maker Diamond Power Infrastructure, IT company GSS Infotech, wind turbine maker Suzlon Energy and petrochemicals company Oricon Enterprises.