Pick and choose

Mumbai, Dec. 2: Warburg Pincus, the US-based private equity investor, is picking up around 27 per cent equity in Jaipur-based coloured gemstone exporter, Vaibhav Gems Ltd. This is Warburg?s first investment in the coloured gem stones business in India.

Vaibhav Gems, a Rs 169-crore company, is the country?s largest exporter of coloured gemstones.

The board of Vaibhav, at its meeting on Thursday, had approved the allotment of shares on a preferential basis to Cortland Investment, Mauritius, a Warburg Pincus group company, at a price between Rs 275 and Rs 280 per share.

Vaibhav today informed the stock exchanges that the total number of shares to be issued ? either as equity shares or warrants that can be converted into shares ? will not be more than 75,27,273.

The price at which the shares will be allotted shall not exceed Rs 280 or less than Rs 275 apiece, it added. At these levels, Warburg will be investing between Rs 207 crore and Rs 211 crore.

The prices, however, are at a discount to the closing price of Vaibhav Gems on the BSE today. The scrip finished at Rs 323.70 after opening at Rs 322.50 and rising to an intra-day high of Rs 351.90. Therefore, at the upper end, it indicates a discount of 13 per cent.

According to Vaibhav, these shares or warrants convertible into equity shares will represent up to 27.29 per cent of the total post-issue paid-up capital of the company on a fully diluted basis. It takes into account 95 lakh global depository receipts that is proposed to be issued by the company where each GDR has one equity share as the underlying security.

Till now, Warburg has invested a little over $1 billion in the country. It was recently in the news after selling a 5.6 per cent stake in Bharti Tele-Ventures to Vodafone. Warburg?s other major investments include those in Moser Baer, Rediff, Kotak Mahindra Bank and Nicholas Piramal India.

Vaibhav has set up a jewellery-manufacturing unit for exports of gem-studded gold jewellery. Last fiscal, it ventured into the international retail market by setting up its wholly-owned subsidiary, Jewel Gem Inc, in the US.

The company has also set up retail chain stores in Alaska and Caribbean under the brand name GenoA Jewellers.