JPMorgan PE partially exits listed consumer internet firm

Private equity investor JPMorgan Partners has taken yet another haircut by selling more shares in a listed consumer internet company acquired from a homegrown venture capital firm five years ago.

JPMorgan CMDB II recently sold 900,000 shares – 3.95% – in online matchmaking firm Matrimony.com for roughly $7.9 million, stock exchange data shows.

The latest tranche follows a partial exit earlier this month when the fund sold about 2.5% stake besides open market share sale in the July-September quarter, taking home about $5 million.

Together, these share sales result in a 30-32% haircut. Since some of the shares were sold in the open market, their sale value is based on the volume weighted average price around the time it likely sold the shares.

JPMorgan had bought the stake from early-stage investor Canaan Partners as part of a secondary transaction in 2015 that comprised a dozen portfolio firms including Matrimony.com.

CMDB II initially sold a part of its holding in the company’s IPO a little over three years ago.

In all, JPMorgan has fetched $35 million so far by selling nearly two-thirds of the shares – a haircut of roughly 10-12% to its cost of investment. While it made a measly 3% returns from the partial exit in the IPO, the gains are wiped out after selling the additional shares lower than its cost of investment.

The fund’s dollar returns may be impacted even more owing to the rupee’s depreciation against the dollar. Since the investment in March 2015, the Indian rupee has depreciated about 22-23% against the greenback.

JPMorgan now owns about 8.33% equity of the company and its stake is currently valued at $18 million.

To be sure, shares of Matrimony.com have surged 15% in two trading sessions following CMDB II’s partial exit.

Shares of Matrimony.com, which is known for its flagship offering BharatMatrimony, closed at Rs 730.05 apiece on the BSE on Tuesday, up 6.1% from the previous close. The stock has touched a high of Rs 764.55 and a low of Rs 251 in the last 52 weeks.

Private equity and venture capital investment firms typically chase an internal rate of return of roughly 20-30% in local currency terms.

An email query sent to JPMorgan, seeking feedback on the returns estimates from the partial exit, did not yield a response till the time of publishing this report.

JPMorgan CMDB II’s other exits

The partial share sale in Matrimony.com is a stark contrast to its complete exit from Ashok Soota’s software services company that recently went public.

JPMorgan fetched handsome returns by selling its entire stake in the IPO of Happiest Minds Technologies for $61 million in September this year. The IPO was subscribed 151 times and its shares doubled on debut .

The firm had a pretty dry run in calendar year 2019 as it neither made an investment, nor clocked an exit, according to VCCEdge, the data and research platform of Mosaic Digital.

JPMorgan sold its infrastructure investment platform Asian Infrastructure & Related Resources Opportunity (AIRRO) in May 2018 to The Rohatyn Group (TRG), a New York-based asset management firm focused on emerging markets.

Later that year, it also exited India Property Online in a secondary deal after online classifieds platform Quikr India Pvt. Ltd acquired the Chennai-based operator of IndiaProperty.com to grow its real estate vertical.

Another Canaan portfolio firm that JPMorgan fully exited was Equitas Holdings in 2017. In that year, the PE firm struck four exits in total, including a partial exit from Narayana Hrudayalaya Ltd.

Source: Vccircle