The private equity fund AION, has decided to completely exit the Ravi Jaipuria-promoted Varun Beverages, the bottlers for beverage giant Pepsi.
AION has sold its 4.5 percent stake in the company at Rs 850 a share, a slight premium over the stock’s closing price of Rs 844.75 on the National Stock Exchange (NSE). This translates into a 25 percent return on equity per year in dollar terms, or 2x returns over the holding period. The fund generated 2x on equity invested in the company.
AION, a joint venture between Apollo Global Management and ICICI Venture, had invested $90 million in Varun Beverages — half of that in debt and half in convertible debentures.
Three years ago, Varun Beverages came up with a Rs 1,100-crore initial public offering (IPO), which was subscribed 1.8 times at Rs 445 a share. After the company was listed, AION sold its stake in various tranches.
AION has so far invested in a number of Indian companies, the latest being Monett Ispat, the steel company it acquired as part of a consortium with JSW through the insolvency route, paying Rs 2457 crore for the deal. This year, it also acquired information technology (IT) and back-office operations of InterGlobe Technologies, the Rahul Bhatia company that runs IndiGo Airlines, for $230 million. In 2016, it also bought — along with partners like former Genpact chief executive Pramod Bhasin and GE commercial finance business head Anil Chawla — the commercial lending and leasing business of GE Capital for $360 million.
Varun Beverages, the flagship company of the Ravi Jaipuria group, in February this year cemented its long-term relationship with PepsiCo.