Paragon part-exits India's Capacite for $14m

According to stock market data, Paragon sold 2.1 million shares for INR417 each, a slight discount to the November 29 closing price of INR419. Paragon held 8.1 million shares before the sale, a 12% stake; the exit will reduce its holding to 8.9%.

Capacite was founded in Mumbai in 2012 and provides end-to-end construction services for residential, commercial and institutional customers. It mainly operates in the Mumbai metropolitan area, Delhi and Bangalore.

Capacite focuses exclusively on building services, unlike many other organized construction companies in India which have additional verticals such as land and infrastructure development. The company believes this concentration gives it an edge over its competitors due to its experience, specialized knowledge and resources.

For the year ended March 2016, Capacite reported INR8.2 billion in revenue, up from INR5.1 billion the year before. Over the same period, net profit grew from INR308 million to INR477 million.

Paragon invested in Capacite last year, committing $10 million from its maiden fund. The firm retained its stake in the company's IPO earlier this year, which saw Capacite sell 16 million shares at INR250 each. Newquest Capital Partners, which invested $21 million in Capacite last year, also did not exit. Newquest currently holds 6.6 million shares in the company, a 9.7% stake.

Capacite was the first investment from Paragon's debut fund, which launched in 2015 and closed in November at $120 million. The firm was founded by Siddharth Parekh, a former investment principal at Actis, and entrepreneur Sumeet Nindrajog. It typically invests $10-15 million per transaction and targets significant minority ownership stakes.

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• Topics
• South Asia
• Open market
• Industrials
• Support services
• Real estate
• India
• Exit
• Paragon Partners
• manufacturing