PE investors to make partial exits through IPO

Murugavel Janakiraman, promoter and managing director of
Online marriage services provider, which owns Bharat Matrimony and other related websites, has said its private equity (PE) investors will make partial exits through a proposed initial public offering (IPO).

The company has private equity investors, including Mayfield, Bessemer and JPMorgan Asset Management, invested in its business. JP Morgan Asset Management bought out the stake in the company from Canaan Partners in 2015. The investors together hold over 40 per cent of the equity in the company. Bessemer is expected to sell around six per cent stake, keeping a small amount of shares in the company, while Mayfield, which has a 10 per cent stake, will sell a small amount and JP Morgan, which has around 20 per cent stake, will sell close to one-third of its holding, according to Murugavel Janakiraman, promoter and managing director of

The company is planning an offer for sale of up to 3,767,254 equity shares. The offer includes 1.46 million shares by Bessemer India, 155,000  shares by Mayfield, 1.68 million shares by CMDB II, 384,000  shares by Janakiraman, and 82,834 shares by Indrani Jankiraman, a member of the promoter group. The primary offering in its previous draft red herring prospectus (DRHP) was to the tune of Rs 350 crore. This has been scaled down to Rs 130 crore in the second DRHP filed recently because the company has posted a profit and will not be looking for more funding towards marketing from the IPO.

“We are planning to construct an office in Chennai and Rs 40 crore out of the funds raised through the IPO will be used for purchasing land. Another Rs 20 crore will be used for marketing expenses, Rs 40 crore towards an overdraft facility and the balance for contingency purposes,” said Janakiraman. The company has a few offices in Chennai, but they are rented. There are close to 1,500 associates in these premises and an office building will improve coordination.

Janakiraman said the company had made a profit of Rs 43 crore even after one-time IPO expenses of around Rs 4 crore. Considering that it is making profit, the company has decided not to raise money for marketing, which has brought down the primary offering from the previous Rs 350 crore to Rs 130 crore now. The company had filed a DRHP to raise around Rs 550 crore last year but it did not complete the process owing to unfavourable market conditions.

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