New Delhi, Aug. 31 -- Private equity firm General Atlantic, which is looking to go public in the US, has hit the sell button on what is turning out to be its showcase India portfolio company after a mixed bag last year in terms of generating liquidity from the country.

The New York-based PE firm has divested over a third of its 22.82% stake in Mumbai-listed KFin Technologies Ltd. It offloaded a 8.7% stake in India's largest securities registrar and transfer agent for about Rs 1,400 crore ($146 million) a few days ago via open market transactions.

The PE firm, which makes both late-stage venture capital and growth equity investments in India, had bought a majority stake in KFin's predecessor Karvy Fintech in November 2018, shelling out a little over Rs 1,000 crore.

In 2019, it participated in a share buyback and pocketed Rs 92 crore. In 2022, the PE firm sold some shares in a pre-IPO transaction and pulled out Rs 100 crore. It also sold shares in KFin's initial public offering for Rs 1,500 crore. In 2023, General Atlantic sold a 10% stake in KFin for Rs 851 crore, or around $102 million, and a year later sold a 5.84% stake for Rs 713 crore.

Last year, it offloaded shares worth Rs 1,790 crore ($210 million) through open market transactions.

With the latest partial exit, General Atlantic has mopped up a total of Rs 6,446 crore, or about $750 million) from KFin. Its remaining stake is worth around Rs 2,382 crore ($250 million) based on current stock prices.

The PE firm's realised anualised return in rupee terms is pegged at 45% with multiple on invested capital (MOIC) of 7.6x. In dollar terms, this comes out to 6.5x with an internal rate of return (IRR) of 41%. For perspective, alternative investment firms typically target 20% IRR in local currency and 15% in dollars.

Overall, General Atlantic is poised to take out around $1 billion across tranches from KFin, making this its biggest exit from India.

KFin's share price has nearly tripled since the company went public in December 2022. This is despite the share price falling by nearly a third since touching a record high in December 2024.

GA activity

The monetisation move from KFin adds to the PE firm's exits from PNB Housing Finance and Capital Foods in 2024 and a sale of shares in Rubicon Research and fashion apparel maker House of Anita Dongre (HOAD) last year.

The PE firm is believed to have beaten the benchmark in the partial exit from Rubicon but likely had to contend with a poor outcome from HOAD.

PNB Housing was one of the largest India investments by General Atlantic while Capital Foods was its first control transaction in the country. General Atlantic took a haircut from the mortgage lender but managed to score benchmark returns by selling Capital Foods to Tata Consumer Products Ltd at an enterprise value of Rs 5,100 crore ($610 million).

In 2023, General Atlantic clocked a full exit from KIMS Hospitals, generating healthy returns, and then completed another full sign-off by selling its remaining 1.16% stake in 360 One (formerly IIFL Wealth Management), pulling out an estimated Rs 200-210 crore ($24-25 million). Overall, the PE firm pulled out almost $400 million from 360 One.

While annualized returns from KIMS were almost twice the benchmark of 20%, the exit from 360 One came with modest profit on an annualized basis.

In January this year, the PE firm inked a deal to invest in Rajkot, Gujarat-based Balaji Wafers Pvt Ltd, picking up a 7% stake for Rs 2,500 crore ($272.9 million). It is also lifting its exposure to Acko Technology & Services Ltd, the company behind Acko Life Insurance and Acko General Insurance, VCCircle reported in April.

Published by HT Digital Content Services with permission from VC Circle.