i Develop Stocks Advisory

Blackstone acquires Titagarh... Private equity fund Blackstone has picked up a minority interest in Titagarh Wagons for Rs 672 a share in a pre-IPO placement. Kolkata-based Titagarh Wagons will sell 23.8 lakh shares in the primary market through an entirely book-built issue. The company will sell 20.68 lakh fresh shares while two investors will offer 3.15 lakh shares through the issue. It is expected to announce the price band for the issue in a couple of days and the public issue is likely to be opened next week. Blackstone is the fifth major investor to put money in Titagarh Wagons. The other investors include GE Capital Infrastructure (15%), JP Morgan (5%), 2i Capital (6%) and ChrysCapital (6.5%). The Chowdharys, the promoter group, holds a 57% stake. It is learnt that Blackstone has bought nearly 2.35 lakh shares for around Rs 16 crore from the Strategic Ventures Fund (Mauritius). The Mauritius-based company bought equity in Titagarh in July 2005 for Rs 976 a share. But its acquisition cost came down, following an 1:8 bonus issue. The bonus issue also brought down the average cost of acquisition of shares by the promoters to Rs 1.1 apiece. Titagarh Wagons managing director Umesh Chowdhary declined to talk about the deal. Titagarh Wagons is a leading railway freight wagon manufacturer. It makes railway wagons, balley bridges, heavy earth moving and mining equipment, steel and SG iron castings. It is one of the approved vendors for defence manufacturing as an ‘industry partner’ to the Defence Research and Development Organisation, Ministry of Defence and also manufactures other products for the Indian defence establishment, such as special purpose wagons, shelters and other engineering equipment.