2,240CR EXIT Apax nets 3-fold gain in Apollo Hosp stake sale

Mumbai: Private equity giant Apax Partners sold 19% stake in Apollo Hospitals for Rs 2,240 crore in multiple open market transactions, which were completed last week. The London-based investor booked 3.3 times profit on Rs 680-crore investments, buoying private equity sentiments laid low by the rupee collapse and lack of exit options.      Apax entered the Prathap Reddy-controlled healthcare chain with a primary investment in October 2007 and followed up with secondary deals a year later. The PE notched up an over 19% stake, partly held through GDRs and P-Notes, making it the second largest shareholder after the Reddys.      "Our take-away from this deal is that good returns are to be made in the Indian private equity story for those who are patient and methodical in their approach to investing," Shashank Singh, MD, Apax Partners India,  told TOI. While Apax held 19% stake, it had voting rights only for 11.5% which helped the PE firm avoid the mandatory open offer clause under the takeover regulations.      Apax has been selective on India with just two investments till date — Apollo Hospitals and iGate Corp. The profitable exit from Apollo also comes at a time when iGate sacked its star CEO Phaneesh Murthy, ruffling $380 million deployed for the Nasdaq-listed company's acquisition of Patni Computer two years ago.      Apollo is among the best performing PE investments of $100 million and above in 2007, the watershed year when there were 47 such deals in India. Only two investments have returned three-fold profits and just four deals recouped even two times profit.      Blackstone's sale of BPO firm Intelenet last year and Warburg Pincus's exits from Havells and Alliance Tire Group are among the few other transactions netting fairly impressive gains.