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Portfolio Focus: Neesa Leisure - Axis PE Investee Company

Here is another one in our Portfolio focus series.

Neesa Leisure, a flagship company of Neesa Group, runs a chain of hotels under the brand name of Cambay. It has ten operational properties spread across India with an aggregate inventory of 947 rooms. It has presence in Ahmedabad, Bangalore, Gandhinagar, Jaipur, Udaipur, Neemrana, Kerala and Goa.

Neesa has also set up educational institutes under the brand 'Cambay Institute of Hospitality Management' at Gandhinagar, Jaipur and Udaipur and has enrolled around 750+ students for various courses till date.

The company plans to develop business hotel with 80-100 rooms and facilities such as restaurants, fitness centre and spa under the brand 'Cambay Sapphire' at Lucknow, Raipur and Nasik.

Axis PE had invested Rs.75 Cr by subscribing to 3,465,347 equity shares at a price of Rs.101 per share and 4,00,000 CCPS of Rs.1000 each in 2008. These CCPS will be converted into shares before IPO. It has also raised funding from HT Media(Rs1.7Cr), Dainik Bhaskar Group’s Writers & Publishers Ltd(Rs5Cr) and Bennett Coleman & Co Ltd’s Brand Equities Treaties Ltd (Rs6.66Cr).

Neesa Leisure has availed Rs.40 Cr term loan from L&T Infrastructure Finance in 2008 for funding its Rajasthan project and availed term loan of Rs. 215 Cr from Axis Bank comsortium consisting of Axis Bank Limited, Bank of India, Syndicate Bank, Corporation Bank, L&T Infra Fin , Oriental Bank of Commerce and IFCI Ltd.

Neesa Leisure Operating Performance

The company filed for an IPO in April this year to raise Rs.200 Cr through fresh issue of shares and an offer for sale by Axis Infrastructure Fund I upto Rs.50Cr and 1,03,746 shares by HT Media Limited, but given the current market conditions, it remains to be seen whether the company will go ahead with the planned IPO.

Neesa Peers on BSE

Axis Private Equity

Axis Private Equity had raised $148mn through its first fund, the Axis Infrastructure Fund in 2008. Axis Bank was the anchor investor in the fund with Rs23Cr. Public sector banks, like Canara Bank, Bank of Baroda, Union Bank and Punjab National Bank and some large corporate also invested in the fund.

In 2010, Axis Bank decided to exit the PE business following a strategic review after Shikha Sharma took over as the bank chief in June 2009. Six companies including IL&FS Investment Managers, Aditya Birla PE, Shapoorji Pallonji Group and US- based Darby Private Equity were interested in acquiring the PE arm of Axis Bank, but other investors like Canara Bank, Bank Of Baroda, Union Bank Of India, Corporation Bank and PNB opposed the ownership to professionals.

In August this year, Axis announced that it will exit 3 portfolio companies - Vishwa Infrastructure, Corrtech International and Neesa Leisure to pay back it's investors. Source by DealCurry


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