India's PE-backed Capacite files for $62m IPO
Capacite Infraprojects, an Indian construction firm backed by Paragon Partners and NewQuest Capital Partners, has filed for a INR4 billion ($62 million) IPO.
The offering will consist entirely of newly issued shares, according to a prospectus, with the company’s PE backers set to retain their stakes. The amount and pricing of the shares has not been announced.
Capacite plans to use INR2.5 billion of the proceeds to meet working capital requirements, which are expected to total more than INR9 billion over the next two years. Another INR520 million will be used to buy construction assets for various projects, and the remainder is intended for general corporate purposes.
Founded in Mumbai in 2012, Capacite provides end-to-end construction services for residential, commercial and institutional customers. It mainly operates in the Mumbai metropolitan area, the National Capital Region, and Bangalore, with Mumbai accounting for about 61% of its total projects as of January 2017.
Unlike other organized construction companies in India, Capacite focuses exclusively on building services, without additional activities such as land or infrastructure development. The company believes this concentration gives it an edge over its competitors due to the amount of experience, specialized knowledge and resources it has obtained during its life.
Capacite reported revenue of INR8 billion for the year ended March 2016, up from INR5 billion the year before. Over the same period net profit grew from INR308 million to INR477 million.
Paragon invested in Capacite last March, committing $10 million from its maiden fund, which announced a $50 million first close at the same time. The vehicle, Paragon Partners Growth Fund I, has a target of $200 million and opportunities for growth capital investments in Indian mid-market companies in the consumer, financial services, infrastructure, industrial and healthcare sectors.
NewQuest committed $21 million to Capacite last October - buying shares from undisclosed existing investors - joined by Infina Finance Private, an investment firm owned by Kotak Mahindra Bank and the Kotak Family. Infina is also an LP in Paragon’s fund.
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