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DE Shaw gives UTI Ventures 50x exit

The Bangalore-based private equity firm has sold its stake in an Indian e-learning company to DE Shaw in what is easily among the largest exit multiples seen in the country.

UTI Ventures, an India-focussed private equity firm, has sold its 35.5 percent stake in e-learning company Excelsoft Technologies to global hedge fund DE Shaw, making a return of fifty times its investment in the company, a source close to the deal told PEO.

Excelsoft Technologies provides its clients with complete e-learning solutions including consulting services, content development, custom software development and product design and engineering services.

Its products are in use in more than 500 companies and universities around the world and some of its clients include Oxford University from the UK, the World Bank, UNESCO, Singapore-based shipping and supply chain management company Neptune Orient Lines, global publisher of educational material Pearson Education, IT services company Infosys Technologies and the Royal New Zealand Navy.

UTI Ventures had invested 25 million Indian rupees ($620 thousand; €400 thousand) for a 35.5 percent stake in Excelsoft in 2001. The firm made 1.25 billion Indian rupees ($31 million; €20 million) from the sale, netting a return of 50 times its investment in seven years, making it probably the most successful private equity exit in India thus far.

The firm confirmed the deal, but declined to disclose further details of the transaction as its parent company UTI Asset Management “is in the process of going in for an IPO”.

A person close to the development said that the sale of UTI Ventures’ stake in Excelsoft attracted the interest of a few private equity funds, before DE Shaw bagged the deal.

UTI Ventures makes growth capital investments in India in sectors such as manufacturing, services and infrastructure, with a focus on companies that benefit from the growing consumer market and the infrastructure boom in India.

The firm’s other investments include Consolidated Construction Consortium, an urban infrastructure service company; Koutons Retail, a men’s apparel retail chain; Laqshya Media, an outdoor media company; Ind Barath Power, a power company focusing on gas, hydro, bio-mass and coal power projects; Shriram EPC, an alternative energy infrastructure service provider; Naturol Bionergy, a bio-diesel producer; Primus Retail, a lifestyle product retail and distribution chain; and Zylog Systems, an IT services company.

DE Shaw established its India presence in 1996 with the setting up of DE Shaw India Software, a technology development firm, in Hyderabad. Over the last two years, the US investment firm has opened two more advisory offices in Mumbai and Gurgaon and has been making private equity investments in the energy, real estate, infrastructure, media and technology sectors.