Lighthouse Exits Bikaji Foods Partially With 10x Returns
- ByStartupStory | November 12, 2022
Lighthouse Funds, a mid-market private equity firm, has made a sizable profit from its four-year investment in snack manufacturer Bikaji Foods International Ltd. As part of a deal where IIFL Asset Management Company Ltd staked Rs 251 crore ($36 million) on the Bikaner-based company, Lighthouse has made a partial exit from Bikaji Foods.
Bikaji did not say how much money was invested in the business but did say that Lighthouse sold some stock. People with knowledge of the situation, however, told VCCircle that about Rs 100 crore was invested in the company, and a comparable sum went to Lighthouse. The company’s promoters took home Rs 51 crore.
One person claimed that the PE firm had more than doubled its initial investment through the deal. One of the individuals listed above claimed, “The Mumbai-based PE firm sold 2.5-3% share during this transaction to IIFL Special Opportunities Fund and collected Rs 100 crore or over 4 times it’s over four-year-old investment.”
According to estimations, this results in an internal rate of return (IRR) of 40–50% in the part-exit, excluding dividend profits over the years, if any.PE firms typically aim for annualised returns on investments of 20% to 30%.In April 2014, Lighthouse paid Rs 90 crore for a 12.5% stake in the maker of snacks. It still owns about 10% of the company. The other person stated, “They are likely to sell the rest during the company’s public float scheduled for next year.
A representative for Lighthouse Finds declined to comment on the situation when contacted. Up until the time this report was published, an email sent to Bikaji Foods and IIFL Asset Management received no response.
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