SAIF makes 2x from two Indian exits

SAIF Partners has sold its stakes in publicly listed Thermax and MindTree, making more than 2x cash and an IRR of 150% on average for both exits.

SAIF Partners, a private equity firm with investments in China, India and Korea, has exited its investments in engineering firm Thermax and IT solutions company MindTree, both of which are listed on the Bombay Stock Exchange.

Both exits generated a more than 2x return for SAIF Partners and generated average returns of about 150 percent, Ravi Adusumalli, general partner at the firm, told PEI Asia.

The private equity firm invested about $15 million each in MindTree and Thermax in a series of buys on the open market in the latter half of 2008 and the early months of 2009. It subsequently divested its stakes in the two companies through a series of share sales on the open market.

SAIF had a stake of 4.83 percent in MindTree as of 30 June 2009. It completely divested its stake in the company in a bulk deal on Thursday last week.

The private equity firm had a stake of 2.68 percent in Thermax as of 31 March 2009, which was watered down to 1.71 percent by 30 June 2009. The firm subsequently divested its stake in full about three weeks ago.

Established in 1999, MindTree specialises in IT services, product engineering, infrastructure management and technical support, independent testing and knowledge services.

Thermax provides solutions in energy and environment engineering. It offers products and services in cooling, heating, waste heat recovery, captive power, water treatment and recycling, waste management and performance chemicals.

SAIF said that investments in public companies make up a small proportion of its portfolio in India. The firm made these investments in listed companies over multiple dates when the valuations of these companies were unrealistically low, Adusumalli said. 

The firm is currently in the market for its fourth private equity fund, the details of which have not been fully disclosed. In May 2007, it closed its third fund on $1.1 billion. The fund allocates up to 80 percent of its capital to Greater China and the rest to India.

Headquartered in Hong Kong and with offices in Beijing, Mumbai, New Delhi and Shanghai, SAIF makes investments across sectors such as consumer products and services, technology, media, telecommunications, financial services and healthcare.