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How was private equity firm Sabre Partners’ latest exit from legacy infra portfolio?

India-centric mid-market private equity firm Sabre Partners that has been focusing on healthcare investments over the last few years has made a full exit from one of its old portfolio firms in the infrastructure sector.

The PE firm has sold its remaining stake in Man Infraconstruction Ltd booking a marginal profit on the latest tranche sale on its eight-year-old investment.

The firm has been part-exiting with small chunks for the last year and a half. Earlier, it had garnered around Rs 15-17 crore. Three months back, it had sold half of its remaining stake for Rs 30 crore in the secondary market and took a haircut of around 10% on its original investment.

Stock market filings show Sabre Partners the rest of its holding on Thursday netting Rs 37 crore.

This means it has just about taken out what it invested.

In 2008, the PE firm had invested in the public-listed construction company through its second PE fund that chased investments in the infra space with a Rs 500 crore corpus.

It had invested Rs 83.4 crore through a primary and secondary purchase of shares in 2008, according to VCCEdge, the data research platform of VCCircle.

Man Infraconstruction share price rose 3.79% to close at Rs 49.30 each on BSE in a weak Mumbai market on Thursday.

An email query sent to Rajiv Maliwal, founder and managing director of Sabre Partners, on the exit, did not immediately elicit a response.

Another investor that had bet on the construction firm is Standard Chartered Private Equity. It had exited its investment in the company at a loss. It sold its stake for Rs 36 crore by selling its entire stake of 6.13% through a secondary transaction in November 2014. It had bought a minority stake in the company for 58.3 crore in 2009.

Rakesh Jhunjhunwala-backed Man Infraconstruction that counts terminals at Nhava Sheva Port among other completed infrastructure projects has seen its fortunes slide down the years. In the last four years alone its revenues have halved and its profit has taken an even bigger hit.

Its revenues declined from Rs 489 crore in FY2011-12 to Rs 226 crore for the year ended March 31, 2016, while net profit shrunk from Rs 54.3 crore to Rs 13.2 crore in the same period.

In the quarter ended June 2016, its net profit jumped more than double to Rs 12.36 crore. However, its sales declined 9.4% to Rs 39.05 crore in the quarter ended June 2016 over the year-ago period.

Sabre Partners
The private equity firm's first fund with a total corpus of Rs 900 crore was aimed at the financial services sector. Its third fund had raised Rs 200 crore for healthcare sector and stands fully invested. Sabre Partners is currently on the road to raise the fourth fund that is also focused on the healthcare sector.

As first reported by VCCircle, it has raised bulk of its targeted corpus after making a first close at Rs 190 crore last September. First close is a fundraising milestone in private equity and venture capital industry, post which the funds can start deploying cash from the money committed by their limited partners (LPs) or investors.

Maliwal had told VCCircle that the final closing is expected by this year-end at around Rs 300 crore.

It has invested in four companies this year including Vyome Biosciences and Invictus Oncology as per VCCEdge. The PE firm also came as an anchor investor in Thyrocare and HCG’s initial public offering (IPO) early this year.

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