Everstone Sells 25% Stake in Restaurant Brands through Block Deals
Everstone Sells 25% Stake in Restaurant Brands through Block Deals

Everstone Capital, the promoter of Restaurant Brands Asia, completed a block deal, selling a 25% stake in the company to a group of investors for a total of Rs 1,494 crore.

The private equity (PE) company will maintain ownership of a 15.44% stake in the firm responsible for operating the Burger King brand in India.

By completing the transaction on Friday, Everstone has now joined a group of numerous private equity firms that have chosen to divest their investments through block deals.

This decision has been driven by the buoyant stock markets and the strong demand from investors for high-quality stocks.

According to data from Prime Database, between January and August this year, private equity (PE) and venture capital (VC) firms offloaded investments worth Rs 57,338 crore through block deals.

This marks an increase from the Rs 41,051 crore exited during the same period in 2022, as illustrated in the provided chart.

Notable exits in recent times include Baring PE's sale of its 26.6% stake in Coforge for Rs 7,684 crore.

Additionally, Alibaba group's Chinese-based firm, Antfin, divested its stake valued at Rs 2,037 crore in Paytm, while Tiger Global completed a block deal to sell its 1.44% stake in Zomato for Rs 1,124 crore.

According to Manisha Girotra, CEO of Moelis India, one of the positive developments in the realm of private equity investments is the increased ease of exiting investments. She noted that many private equity exits have occurred through block deals, with eight such transactions taking place in the past two months.

According to bankers, over the past two years, the equity sell-off activity has been primarily driven by private equity investors and promoters selling their stakes through block deals as the secondary markets have stabilized and reached record highs.

S Ramesh, Managing Director and CEO of Kotak Investment Banking, stated that there has been a notable increase in the influx of private capital into India, leading to a trend of financialization among Indian corporations. Over the past 2-3 years, private equity investors have not only been investing in unlisted subsidiaries and private companies but have also been gaining significant control in publicly-listed firms. Many of these private investments have resulted in exits at substantial valuations, instilling confidence in the sustainability and depth of the Indian market.

These investors are actively brainstorming and assessing numerous investment prospects, and a significant portion of these efforts is likely to materialize into new deals.

 
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