Date : 16 April 2018
Canbank Venture Capital Fund Ltd, a subsidiary of state-run Canara Bank Ltd, has exited its six-year-old investment in healthcare provider GNRC Ltd with more than three times returns.
The Guwahati-based company bought back the stake held by Canbank Ventures through the Rs 75 crore infusion from Avendus Finance and Avendus Structured Credit Fund, the non-banking financial services arm and debt fund of Avendus Capital, respectively.
In 2012, Canbank Venture had invested Rs 20 crore for a 30% stake in the company through its fifth fund, Emerging India Growth Fund, shows VCCEdge, the data research platform of News Corp VCCircle.
Canbank Ventures took out 3.5 times its investment with an internal rate of return of about 25% in GNRC, according to VCCircle estimates. In comparison, PE firms typically chase 20-30% IRR in rupee terms.
When contacted, Canbank Ventures declined to comment on the exit numbers.
Last June, VCCircle had reported that the company was in advanced discussions to raise fresh capital from new investors.
“The deal falls under the preferred sector, healthcare, and this transaction fits in as it helps GNRC in multiple ways, besides allowing it to scale up to the next level with this new business model,” a report by The Times of India said citing Avendus Finance MD and CEO Sandeep Thapliyal.
GNRC, which was founded by neurologist Nomal Chandra Borah in 1987, runs hospitals in Assam under the GNRC Hospitals brand.
The company clocked net sales of Rs 120.24 crore in 2015-16, compared with Rs 105.33 crore in the previous fiscal year. In 2017-18, it reported Rs 165 crore in turnover and Rs 32 crore in profit.
Acorn Tree acted as the financial adviser to the transaction.
Canbank ventures has so far managed five funds with a total corpus of Rs 553 crore. It was also selected by the Department of Electronics and Information Technology (DeitY) to manage the Rs 2,206-crore Electronic Development Fund.
Canara Bank is an anchor investor in the Rs 436-crore Emerging India Growth Fund, which primarily focuses on the SME sector. It has backed several companies, including Ravi Technoforge Pvt. Ltd, Shree Pushkar Chemicals and Fertilisers Ltd, MITCON Consultancy and Engineering Services Ltd, Gayatrishakti Paper and Boards Ltd, Nichepro Technologies Pvt. Ltd and Thejo Engineering Ltd.
Canbank Venture is in the process of setting up its sixth fund, Empower India Fund, with a target corpus of Rs 650 crore.