Stanchart-, Sabre Abraaj-backed company to IPO

Man Infraconstruction hopes to raise INR1.5bn through the new share offer, which will dilute the stakes held by Standard Chartered Private Equity and Sabre Abraaj.

Man Infraconstruction, a Mumbai-based portfolio company of private equity firms Standard Chartered Private Equity and Sabre Abraaj, plans to raise about INR1.5 billion ($32 million; €22 million) from an initial public offering (IPO).

SCPE and Sabre Abraaj did not respond to requests for comment at press time.

The company has filed a draft prospectus with the Securities and Exchange Board of India (SEBI) for a fresh issue of roughly 5.6 million shares, which will see an 11.36 percent stake in the company move into public hands. It anticipates being granted approval “near December or January”, a company spokesman told PEI Asia.

Man Infraconstruction provides construction services for port infrastructure, residential, commercial, industrial and road infrastructure projects. The company has implemented projects for port operators Maersk and DP World. Its EBITDA has more than doubled with each fiscal year, from 2007 to 2009. This year, the company booked an EBITDA of INR1.5 billion.

Currently, Standard Chartered Private Equity and Sabre Abraaj hold stakes of about 7 percent and 9 percent respectively in the company. The firms each have a seat on its board as well. According to the prospectus, Standard Chartered Private Equity invested INR157.5 million in the company this March, upping its stake by 1.1 percent while Sabre Abraaj invested INR567 for a further 4.1 percent stake in the company last October.

Man Infraconstruction’s founders own a majority stake of roughly 71 percent in the company, which will fall to approximately 63 percent after the issue.

The proceeds from the IPO will be used to buy equipment which will enable the company to bid for larger and more complex projects. It will also be used for general corporate purposes.

Standard Chartered Private Equity, the private equity arm of the bank, typically invests between $10 million and $50 million per deal. The firm invests across a range of industries, focusing on mid- to late-stage companies and management buyouts across a range of industries. It targets businesses based and operating in Greater China, Korea, Southeast Asia and India.

Formed between 2002 and 2003, Sabre Abraaj is an equal joint venture between Mumbai-based Sabre Capital and Middle Eastern investment firm Abraaj Capital. The firm makes growth investments in India and its previous deals in the Indian infrastructure sector include ECI Engineering and Construction Company, an infrastructure development and construction company, and Ramky Infrastructure, another integrated infrastructure development and management company.