Everstone Capital, the promoter of Restaurant Brands Asia, recently completed a significant transaction on Friday by selling a 25 percent stake in the company for INR 1,494 crore through block deals with a group of investors.
The private equity (PE) firm will maintain ownership of a 15.44 percent stake in the company, responsible for operating the Burger King brand in India.
With Friday’s deal, Everstone has now joined the ranks of numerous private equity firms that have successfully divested their investments through block deals, capitalizing on the surging stock markets and strong investor demand for high-quality stocks.
According to data from Prime Database, between January and August of this year, private equity (PE) and venture capital (VC) firms collectively exited investments worth INR 57,338 crore through block deals. In comparison, the figure for the same period in 2022 was INR 41,051 crore.
Among the noteworthy exits, Baring PE’s divestment of its 26.6 percent stake in Coforge for INR 7,684 crore stands out. Notably, the Alibaba group’s China-based firm, Antfin, recently offloaded its Paytm stake for INR 2,037 crore, and Tiger Global successfully sold its 1.44 percent stake in Zomato for INR 1,124 crore through block deals.
“In terms of private equity investments, the best thing that’s happened is that exits are much easier now. A lot of PE exits have happened through block deals. In the last two months, eight trades have taken place,” said Manisha Girotra, chief executive officer (CEO) of Moelis India.
According to bankers, over the past two years, the equity sell-down activity has been primarily driven by private equity investors and promoter sales through block deals, thanks to the stability and record highs in the secondary markets.
“Many private equity investors have been enthused with success achieved through sell downs on the secondary markets. This opens up sustainable alternative routes to exits through mergers and sale to other private equity investors,” said a banker.
“We are witnessing financialisation of corporate India due to the avalanche of private capital coming into India. In the last 2-3 years, private equity investors have been taking control in listed companies in addition to investment in unlisted subsidiaries and private companies. Many of these private investments have seen exits at high valuations, thereby giving confidence around sustainability and depth of the Indian market,” said S Ramesh, managing director (MD) & CEO, Kotak Investment Banking.
These investors are consistently generating and assessing a variety of investment opportunities, and it’s expected that a significant portion of them will lead to new deals.
“These sell downs would help improve liquidity, deepen equity markets and reduce impact costs,” he said.
