New Delhi, Aug. 18 -- Motilal Oswal Alternates (MO Alts), which wrapped up fundraising for its fifth flagship PE vehicle earlier this year after collecting Rs 8,500 crore (about $938 million), is signing off from a legacy investment made back in 2014 with a sharp haircut.
The alternative investment arm of Mumbai-based Motilal Oswal Group has divested around three-fourths of its remaining stake in Mumbai-listed non-bank lender Intec Capital.
MO Alts had made an uncharacteristic move to pick up a large stake in Intec Capital in 2013-2014, and is still counted as a co-promoter of the company. It committed around Rs 60-70 crore to buy around 35% of Intec Capital. This included shares it acquired via an open offer as it exceeded the threshold that triggered a mandatory public offer then. The transaction valued Intec well over Rs 100 crore back then, post money.
The company's share price went on a tailspin soon after and kept on sliding when the Covid-19 pandemic took its share price to just a tenth of its former self when it attracted the PE backer. The stock has recovered a little since then, but that has not been enough to make much of an impact on its shareholders' fortunes. Intec currently has a market capitalisation of less than Rs 28 crore.
MO Alts had been trimming its stake in Intec via small open market share sales since late 2022. It had encashed around Rs 1 crore through 2023-25. Earlier this year, it pulled out about Rs 3 crore, offloaded a large chunk.
The PE firm is estimated to have sold an additional stake for around Rs 3.3 crore, bulk of it being picked up by Intec promoter Sanjeev Goel. Its remaining stake is worth Rs 1.3 crore.
Broadly, MO Alts could be looking to move on with around Rs 8-9 crore, translating into a loss of 85-90%.
MO Alts' other exits
For MO Alts, the partial exit from Intec comes at a time when it is spinning high returns from another portfolio company. It tendered some shares of Molbio Diagnostics via an IPO, generating benchmark-beating returns.
Earlier this year, the firm agreed to sell its stake in Ahmedabad-based Arinna Lifesciences Ltd, a company it backed over a decade ago, with below-par returns.
It also fully exited manufacturing company Happy Forgings that it had backed more than seven years ago with benchmark returns and hit the sell button on its eight-year-old investment in non-bank lender MAS Financial Services.
MO Alts manages approximately $3.3 billion across private equity, real estate, and private credit strategies. The PE business, established in 2006, manages approximately $2 billion. The real estate platform, launched in 2009, manages about $1.1 billion. It launched its maiden private credit fund last year, with an aim to raise as much as $336 million, and marked the fund's first close in February.
MO Alts made liquidity moves from six companies last year, including partial exits from Happy Forgings, MAS Financial and Intec. It also made a partial exit from Molbio Diagnostics Ltd, logged out of IKF Finance, and sold its entire stake in Ganesh Consumer Products Ltd via the company's initial public offering.
Overall, the firm has made 51 PE investments and completed 24 exits till date, generating about $1 billion in liquidity and realized a 4x multiple on invested capital. Its recent investments include Lahori Zeera, Sensacore, and Vistaar Finance, besides a recent private credit deal for electric bus platform JBM.
Published by HT Digital Content Services with permission from VC Circle.