New Silk Route (NSR), now known as Rivendell PE, may sell a chunk of its stake in auto parts maker Rolex Rings Ltd through an initial public offering (IPO) of the company, 14 years after it invested in the company.
NSR, founded by former McKinsey CEO Rajat Gupta and Parag Saxena, was one of the most high profile private equity investors in India before the 2008 global financial crisis derailed its many investments.
The fund invested over $1 billion in more than a dozen investments in India. Gupta stepped down from NSR in 2012 after he was convicted in an insider trading case by the US securities regulator.
In 2007, NSR invested ₹164 crore ($40 million) in Rolex Rings.
The investor holds a 45.5% stake in the company, as per the draft IPO prospectus filed with markets regulator Securities and Exchange Board of India (Sebi).
Through the IPO, NSR will sell 6.5 million shares—over half of its current shareholding in the company.
The partial stake sale is expected to fetch NSR around ₹700 crore, said a person aware of the IPO details on condition of anonymity. The company will raise ₹70 crore in fresh capital, which will be used to fund working capital requirements.
"Like many companies that invested heavily in capex, Rolex Rings, too, went through a bad phase after the Lehmann collapse. In fact the company went into the so-called corporate debt restructuring (CDR) process," the person cited above said.
"But it managed to emerge from CDR successfully with hardly any loss for its lenders and, since then, the company has been on a growth path," he added.
"The IPO has been in the works for many years. But the auto slowdown in 2019, followed by the covid pandemic created a difficult environment for going public."
While the company reported a revenue of ₹911.2 crore in fiscal 2019, its top line slid to ₹675.3 crore in FY20. For the six month period to September, Rolex Rings reported a revenue of ₹225.4 crore.
Rolex Rings is a manufacturer and global supplier of hot rolled forged and machined bearing rings and automotive components for two-wheelers, passenger vehicles, commercial vehicles, off-highway vehicles, electric vehicles, industrial machinery, wind turbines and railways, among other segments.
Rolex Rings started its manufacturing operations in 1988 with its first plant in Rajkot. Today, the company has three manufacturing units in Rajkot.
Investment banks Equirus Capital, IDBI Capital and JM Financial are advising the company on its IPO.
March 21, 2021 at 03:05PM
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Rajat Gupta founded PE fund to part exit auto parts firm Rolex Rings via IPO - Mint
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Rolex
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