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IL&FS, Kotak PE looking to exit Bangalore based BFW

MUMBAI: Private equity funds IL&FS and Kotak Private Equity are looking to exit Bangalore-based machine tools maker BFW, an investment banker with knowledge of the development said. 

The two PE funds had jointly invested 25 crore for an undisclosed stake in 
BFW seven years ago. The unlisted machine tools maker, which has a turnover of more than 450 crore, has several clients overseas. 

"Today, the funds are eyeing a valuation of around $100-120 million ( 550-600 crore)," the banker, who did not wish to be named, said. The spokesperson for BFW did not respond to e-mailed queries sent by ET seeking information on the development. 

Archana Hingorani, IL&FS' executive director and CEO, and Vivek Joshi, Kotak PE's director nominee on the BFW board, declined comment. According to another banker, both PE funds have begun talks with strategic investors from Asia and Europe to sell their stake. "Since the company has grown many fold in the past years, there is interest from strategic buyers. However, right valuation expectation will remain key for the investors," the second banker, who did not wish to be named, said. 

BFW, which started operations in 1961 as a joint venture with Germany's Fritz Werner Werkzeugmaschinen, became a wholly owned entity of the Indian promoter, the Kothari Group, in 2003. 

People in the know said the Kothari Group, which holds majority stake in BFW, is unlikely to dilute stake further for a strategic investor. 

BFW, which has leveraged its PE network to expand overseas, has customers in Italy, Germany, France, Netherlands, Oman, Russia, Sri Lanka, Saudi Arabia, UAE and Thailand.It counts carmakers Honda Motors, Maruti Suzuki, Kirloskar Toyota and auto component-maker Bosch among its clients.