Beacon India buys 1% of Bay Capital-backed Sterling

The PIPE transaction saw the Mumbai-based fund acquire shares in the holiday business for INR84.5 ($1.6) each, or a total of INR45 million, according to VCCircle. The company's share price rose by almost 3%, and the shares were trading on the Bombay Stock Exchange at INR86.15 apiece as of Wednesday morning.

In August last year, Sterling raised around INR1.2 billion through a preferential allotment of shares and convertible warrants to a group of investors including high net-worth individuals such as Rakesh Jhunjhunwala and stock market icon Radhakishan Damani, as well as investment funds and the company's own promoter. The subscribed shares were priced at INR75 each.

Sterling is a major timeshare company in India, with a network of 14 resorts in 12 destinations across the country. The firm - which recently appointed Ramesh Ramanathan as its new managing director - has nevertheless reported losses for at least the past five years, on a turnover of INR395 million for 2011.

Bay Capital, formerly Indus Hospitality Fund, became involved with Sterling in July 2009, when it acquired 19.37% of the company's shares for around INR280 million, in conjunction with India Discovery Fund. The co-investors later upped their stake to 22.8%, although this shareholding will be slightly diluted following Beacon's entry into the capital structure.

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• Topics
• South Asia
• PIPEs
• Consumer
• Consumer
• India
• Beacon Private Equity
• PIPE