Wednesday, January 31, 2007

T Rowe Price plans mutual fund business in India

T Rowe Price, one of the world’s largest investment management companies, plans to enter the mutual fund business in India. They follow a slew of global asset management companies such as Credit Suisse and JP Morgan eyeing a pie of the country’s booming asset management market. T Rowe Price is already invested in companies such as Bharti Airtel, Balaji Telefilms, Financial Technologies, ICICI Bank and Moser Baer through T Rowe Price New Asia Fund.

T. Rowe Price provides a broad array of mutual funds, sub-advisory services, and separate account management for individual and institutional investors, retirement plans and financial intermediaries. The company also offers a variety of sophisticated investment planning and guidance tools. It manages over $308.1 bn assets combining the assets of T. Rowe Price Associates, Inc., T. Rowe Price International, Inc., T. Rowe Price Global Investment Services and T. Rowe Price Global Asset Management. Several global majors are seriously looking at the country’s AMC business, buoyed by the rising stock markets and the low penetration of the mutual fund products among retail investors. Last week, UBS acquired Standard Chartered’s Indian AMC business. Korean company Mirae Assets Group and AIG are also awaiting the regulator approval, as all these companies plan a solo entry into the country.

Read the Business Standard article.

Reserve Bank of India hikes repo rate by 25 bps to 7.5%, keeps other rates unchanged

The Reserve Bank of India (RBI) has hiked the repo rate (rate at which RBI lends to the market) by 25 bps to 7.5%, while keeping reverse repo (rate at which RBI borrows from the market), bank rate and Cash Reserve Ratio (CRR) unchanged at 6%, 6% and 5.5%, respectively. The bank has also kept inflation target steady at 5-5.5%.

Read more in the Business Standard article.

Tata Steel makes the winning bid for Corus at 608 pence per share

Tata Steel has been declared the winner of the Corus bid by the UK Takeover Panel. Tata Steel made the winning bid of 608 pence per share versus 603 pence per share that was bid by Companhia Siderurgica Nacional (CSN) in the ninth round of bidding. The deal pegs the EV of Corus at $13 bn and puts its market capitalization at $10.9 bn. The Tata-Corus combine will create the world's fifth largest steel producer. Corus was created through the combination of British Steel and the Netherlands' Royal Hoogovens in 1999.

Lazard Limited and Goldman Sachs Group, Inc. were the financial advisers to CSN. UBS AG acted as CSN's corporate broker. Credit Suisse Group, JP Morgan Cazenove and HSBC Holdings Plc were advisers to Corus. NM Rothschild & Sons Limited, Deutsche Bank AG and ABN-AMRO Holdings NV were advising Tata Steel.

Read minutes of the bidding, further news comments and the entire story of the acquisition in Business Standard.

Trinity Capital buys 10.43% in Pipavav Shipyard

Trinity Capital has bought a 10.43% stake in Pipavav Shipyard Limited for Rs. 104 crores. Pipavav Shipyard has been promoted by Nikhil Gandhi-backed Sea King Infrastructure. IL&FS and EXIM Bank are the existing investors in Pipavav Shipyard; they have a majority 51% stake in the company. As part of the transaction, Trinity will build a 150 acre-township in the vicinity of the shipyard. This will provide housing, recreational facilities, schools, hospitals and commercial offices.

Pipavav Shipyard plans to build the largest integrated ship building yard in India, near the Pipavav port in Gujarat. The yard will also be the fifth largest in the world. It will have a capacity of 300,000 tonnes (dead weight tonnage). The Pipavav port was developed by the Nikhil Gandhi Group and is now handled by Maersk. The 175-acre shipyard will have the capability to build ships and vessel types ranging from aircraft carriers and luxury liners to oil tankers. It will have the capacity to build 12 large ships simultaneously. The project is likely to see investments of Rs. 8000 crores over the next 7 years. The shipyard will be strategically located between the two busy ports of Kandla and Mumbai. It will also be the only major shipyard between Dubai and Singapore.

Read the article in Business Standard.
Related Post: Trinity to raise additional funds of $ 1bn for Indian realty

NDTV Networks discusses stake sale to Blackstone; may list on LSE AIM

Rumour has it that Blackstone is probably looking at buying a stake in NDTV Networks, an NDTV Group company as part of an investment consortium. NDTV Networks plans to raise $130-160 mn by diluting 25-30% to the consortium, valuing the company at $433-640 mn. The money raised will be used for establishing new channels and businesses. NDTV Networks intends to list on the London Stock Exchange AIM market by the stake sale. Jefferies International Limited is the merchant banker to the issue.

Blackstone had recently invested $275 mn in Hyderabad-based Ushodaya Enterprises, owners of Eenadu and ETV, and Ramoji Rao Film City, one of the largest investments by a private equity fund in an Indian media company (See Related Post).

NDTV Networks will invest $106 mn of the cash in NDTV Imagine Limited, a Hindi mass entertainment channel with film director Karan Johar as partner, and $25.3 mn in NDTV Lifestyle Limited, a channel dedicated to travel, food, shopping, health and wellness. NDTV Networks also owns NDTV Labs, which develops technology and software solutions for TV broadcasting, NDTV Convergence, which owns and operates websites, and 50% in NDTV Media Services Private Limited, a JV with Genpact India Holdings, a media process outsourcing firm for overseas clients.

Read the Business Standard article.

JK Cement buys Nihon Nirman for Rs. 42 crores

JK Cement has acquired Nihon Nirman from the Industrial Development Bank of India (IDBI) for Rs. 42 crores. The acquisition of the 300,000-tonne Nihon Nirman plant will push up JK Cement’s capacity to produce grey cement to 4.3 mn tonnes per annum. JK Cement would invest another Rs. 33 crores for converting the white cement making plant into a grey cement plant. The production is expected to begin by September and would help JK Cement increase its grey cement capacity at a lower cost. The grey cement would be produced from Nihon Nirman and will be sold in the northern markets, where the company enjoys a strong presence. A team from the Japanese firm Taiheiyo Cement Corporation visited the Nihon Nirman site and calculated that it could produce 300,000 tonnes of grey cement per annum. The plant will cater to Rajasthan market, especially in the Jodhpur and Ganganagar belt. With this new grey cement plant, the company expects to save up to Rs. 1000 per tonne.

Article in the Business Standard.

Air India, Indian merger to be cleared by Union Cabinet by Feb-end

The merger of India’s international airline Air India and domestic carrier Indian may get clearance by the Union Cabinet by February-end. The Committee of Secretaries has submitted its recommendations regarding the merger to the Group of Ministers (GoM) headed by External Affairs Minister Pranab Mukherjee. The GoM will meet soon for a final consideration of the recommendations before sending it for the Union Cabinet’s approval. Once the Cabinet approval is received, the two carriers will undertake the legal steps necessary for the merger which should be completed within 3-4 months. However, complete operational and manpower integration will take as much as 12-18 months. Total integration of the two carriers would be completed by end-2008.

The merged entity will become one of Asia's largest airlines with a fleet strength of more than 100 aircrafts. It will have one chairman and one board of directors. It will also add more aircrafts and introduce new routes. The advantages accruing from the merger would comprise additional capacity, additional routes and staff rationalization as excess staff could be deployed on new routes. Following the global trend, the merged entity will cater to both international and domestic markets.

Read The Economic Times article.

Tuesday, January 30, 2007

Merrill names Sumeet Puri as head of India equity capital markets

Merrill Lynch has named Sumeet Puri as head of equity capital markets for its Indian operations as Wall Street firms rapidly expand their teams in the booming Indian capital markets. Sumeet Puri has been head of Asian execution and syndication and will also be in charge of Indian structured origination. Puri has partly spent his career in Mumbai, and is one of a growing number of bankers who are returning to India as deal volumes heat up and salaries for top talent become competitive with those in more developed markets like Hong Kong.

Merrill has increased its stake in its DSP Merrill Lynch JV in India to a controlling 90% from 40% for a consideration of $500 mn. Merrill was the fourth-ranked book-runner of Indian equity deals last year, according to market data provider Dealogic.

Indian investment banking revenues rose 23% to a record $413 mn in 2006, although fees on individual deals tend to be lower than in other markets due to intense competition. Indian equity deals had an average fee of about 1.6% last year, compared with nearly 2.3% for an average Chinese deal.

Read the article in Reuters.com.

Trinity to raise additional funds of $ 1bn for Indian realty

UK-based real estate fund Trinity Plc is planning to raise fresh funds. India-focused real estate fund Trikona Capital is the asset management company of Trinity promoted by two US-based entrepreneurs Rakshid Chugh and Aashish Kalra. This brings Trinity’s total fundraising to $1 bn this year. Trinity earlier had raised about $500 mn at London Stock Exchange’s AIM market last year. In addition to a secondary listing at the AIM market, it will also raise another private equity fund.

The secondary listing at the AIM market is expected to garner nearly $500 mn and the remaining will be raised through a PE fund. Trikona has declined to confirm the break-up of how the funds would be raised. The additional funding will be ploughed into the real estate sector.

Trikona is already in talks with several foreign investors to raise this additional funding. It has till now deployed funds worth $250 mn in the real estate sector and has committed funds worth $1 bn. Trikona has recently made investments in IL&FS Transportation Networks. It has also invested $20 mn to pick a 16% stake in a project owned by Kapstone Constructions. In October last year, Trikona entered into a JV with real estate developer Lokhandwala Builders for a residential project in Mumbai at an estimated cost of $103.4 mn. The fund picked a 49% stake in the venture for $21.5 mn.

Read The Economic Times article.

IndusInd Bank to raise Rs. 200 crores through GDRs; reports drop in net profit for 3rd consecutive quarter

IndusInd Bank will raise up to Rs. 190-200 crores through an issuance of global depositary receipts (GDR). This would lower the promoters’ stake holding in the bank to from 31.34% to 28%. It was also in talks with the ANZ Grindlays Group for a 5% placement. However the talks seem to have fallen out.

For the December quarter, the bank has recorded a 21% dip in its net profit to Rs. 21.6 crores, from Rs. 27.4 crores reported a year ago. IndusInd Bank has been reporting a substantial dip in net profits for the past three consecutive quarters. The sharp dip in the bank’s income from the securitization business, coupled with a rise in provisioning against NPAs, taxes and standard assets, took a toll on the bank’s earnings in the quarter under review. While net interest income was down 15.03% to Rs. 62.81 crores (Rs. 73.9 crores), income from non-interest streams was up 66% to Rs. 92.9 crores, vis-à-vis Rs. 55.98 crores earned a year ago. Operating profit of the bank rose by 57% to Rs. 69.8 crores, up from Rs. 44.5 crores.

Article in The Economic Times.

Catholic Syrian to sell 15% stake to AIF Capital Development; seeks RBI nod for sale

Kerala-based Catholic Syrian Bank is in the process of selling a 15% stake to AIF Capital Development, a Mauritius-registered private equity firm. It is seeking the Reserve Bank of India’s (RBI) permission for the same. The RBI’s policy on shareholding in private sector banks allows any single entity to own a maximum of 10% stake in a bank. Catholic Syrian Bank hopes to get clearance from the RBI to have a single shareholder owning more than 10% stake as has been allowed in Yes Bank (Rabobank - 19.29%) and Centurion Bank of Punjab (BankMuscat – 17.76%). AIF Capital Development has already obtained clearance from the Foreign Investment Promotion Board (FIPB). The government’s guidelines allow up to 74% foreign ownership in banks.

The bank plans to make a preferential allotment to AIF Capital to fulfill the central bank’s requirement that every private sector bank must have a minimum net worth of Rs. 300 crores. The bank had a net worth of Rs. 215.58 crores as on March 31, 2006. The Kerala-based bank has a network of 334 branches and extension counters, which include 5 NRI branches, 5 SSI branches, 5 industrial finance branches and 4 service branches.

Read the Business Standard article.

Garment manufacturer Mudra Lifestyle to come out with an IPO; price band at Rs. 75 – Rs. 90

Mudra Lifestyle Limited, a fabrics and garments manufacturer has fixed a price band of Rs. 75 – Rs. 90 for its initial public offer (IPO) of 9.58 mn equity shares. The funds raised will be utilized to finance the company's expansion plans. The IPO opens on Feb. 8 and closes on Feb. 14. The sole book running lead manager for the issue is SBI Capital Markets Limited. The shares are proposed to be listed on BSE and NSE.

The company will be investing over Rs. 177 crores to expand its manufacturing facilities by setting up a new integrated unit having all process of yarn dyeing, weaving and processing at Tarapur and garment manufacturing near Bangalore. Out of the total investments, the company proposes to utilize debt up to Rs. 100 crores. Mudra Lifestyle proposes to raise the balance amount through IPO.

The issue through 100% book-building process constitutes 26.62% of the post issue paid-up capital of the company. It has earlier made a pre-IPO placement of 1.92 mn equity shares to SIDBI Venture Capital Limited and State Bank of India. The net offer to public will constitute 25.29% of the post issue paid-up capital of the company.

For the fiscal year 2005-06, the company's total income was Rs. 107 crores, while PAT was Rs. 9 crores.

Read the article in The Economic Times.

Mitsui to divest its 51% stake in mining major Sesa Goa

The Economic Times reports that Japanese conglomerate Mitsui and Company has decided to sell its 51% stake in Sesa Goa, India’s largest iron ore mining company. Morgan Stanley is the advisor to Mitsui on the sale. Some of the biggest names in steel and mining have shown interest in acquiring Mitsui’s stake. These include Arcelor-Mittal, Tata Steel, JSW Steel, BHP Billiton and Rio Tinto. Sesa Goa is the only company in which Mitsui has a majority stake. The Japanese major holds an equity stake of less than 51% in some of the world’s top iron ore mines, which include companies like CVRD of Brazil and in Australia.

Related Post: Mitsui’s 51% stake in Sesa Goa up for sale

Himatsingka to acquire majority stake in Italian textile brand Bellora

Bangalore-based textile design and manufacturing firm Himatsingka Seide is acquiring 70% equity stake in Italian textile company Giuseppe Bellora SpA for an undisclosed amount. The transaction is expected to be completed in February 2007. The acquisition is part of Himatsingka's strategy to acquire high-end distribution networks in the global home textile segment. Established in 1883, Bellora is a pan-European luxury brand in the bed linen segment and has generated revenues of about €29 mn in 2006. Apart from exclusive stores in Italy and other parts of Europe such as Spain, Portugal, Switzerland, Germany and France, the brand has a presence in departmental stores, like Harrods in London, La Rinascente in Milan, and Bonne Marche in Paris, among several others.

Read the article in The Economic Times.

Monday, January 29, 2007

Chennai-based IT company Teledata in a $200 mn buyout in Singapore

Teledata Informatics, a Chennai-based software company, may make its second acquisition in Singapore following its Jan 12 acquisition of IT services company Soltius Private Limited. The company is into systems integration; the deal is valued at around $150-200 mn. The name of the company has not been disclosed.

Teledata Informatics offers enterprise-wide solutions for marine, education and utility sectors, apart from providing e-learning training and solutions. Teledata had acquired Soltius through its Dubai subsidiary, Bitech International. Soltius offers technology business solutions and services that focus across horizontals such as enterprise resource planning (ERP), business-to-business integration, mobile solutions, systems integration and product implementation, among others.

Article in Business Standard.

UK’s Centric, Fox Mandal and the Hinduja Group to float LPO JV

UK-based contact centre Centric has entered in to an alliance with the Hinduja Group and leading Indian law firm Fox Mandal Little to set up one of India's largest legal process outsourcing (LPO) firms. The three-way JV, to be called Centric LPO, is likely to employ over 1000 lawyers initially and aims to make India an outsourcing hub for international legal practices. It will be 40% owned by the UK-based outsourcing major and 60% by the JV between Hinduja TMT Technologies and Fox Mandal, with Hinduja TMT holding the majority stake. Hinduja TMT had recently completed the acquisition of US-based BPO Affina. The Hinduja TMT-Fox Mandal JV will have four members on the LPO board while Centric will have two. Centric will use its existing customer base in these markets to woo clients for the new business. Similarly, Fox Mandal will provide the legal expertise while the Hindujas the process skills. The JV will become operational in the next two months and that Centric had already lined up business from UK and US clients. The LPO will focus on every legal aspect-from the low-end secretarial works to law firm accounting and high-end legal work. In two years, it will ramp up to 2000 people.

The LPO segment is poised to cross $6 bn by 2010 and $15-$20 bn by 2015. LPO customers include legal departments of multinationals, international law, legal publishing and legal research enterprises. As of now, it accounts for less than 11% of the $6.3-billion ITeS-BPO pie. Other prominent players in the Indian LPO space include Pangea3, OfficeTiger and Integreon, which is also a BPO player, and law firms such as AZB & Partners.

Read the article in The Economic Times.

UB's bid for Whyte & Mackay hit by price issues

United Breweries’ bid for scotch whisky major Whyte & Mackay seems to be running into problems with the British company believed to have raised the price tag to £600 mn. The UB Group and Whyte & Mackay were holding negotiations during the past six months, but the two have failed to reach a conclusion due to differences over the valuations. The UB Group had offered a little over £400 mn; Whyte & Mackay did not agree to this price, which was later upped to around £500 mn.

Whyte & Mackay is the seventh-largest Scotch maker in Scotland with a turnover of $283 mn. It owns major brands like Isle of Jura, Dalmore, Vladivar Vodka and Whyte & Mackay.

Read more in the article in The Economic Times.

Soros’ Quantum fund hikes stake to 5.1% in Reliance Capital

Legendary investor George Soros, through his Quantum investment fund, has hiked his stake in Reliance Capital from 4.8% to 5.1%. The fund has bought nearly 500,000 shares of Reliance Capital to take its total holding in the company to 11.3 mn shares worth about Rs. 700 crores. As of December-end, Quantum was holding about 10.8 mn shares in the financial services firm. Reliance Capital and George Soros could co-operate to launch an offshore real estate fund which would invest in the Indian realty sector. In addition to the 5.1% stake in Reliance Capital, George Soros also holds about 11% in Reliance ARC.

Read the article in The Times of India.

SingTel keen on acquiring Vodafone's 10% stake in Bharti

SingTel has formally conveyed its interest in Vodafone’s 10% stake in Bharti Airtel to the British company and its advisors UBS. Vodafone has initiated talks with SingTel, Singapore’s largest telecom group, to sell its 10% stake in Bharti Airtel. As per law, Vodafone would have to dilute its holding in Bharti Airtel, if it wins the $18 bn auction of Hutchison Essar. At present, SingTel owns 30.5% stake in Bharti Airtel. Bharti Airtel is India’s biggest mobile operator with more than 30 mn customers. India is the world’s fastest growing mobile market. Analysts forecast the country will have 500 mn users by 2010.

Read the article in The Economic Times article.

SEBI investigates structured deals in IPO allotments

The Securities and Exchange Board of India (SEBI) is investigating all public issues in the past three months after it found in the offering of Nissan Copper that allotments and subsequent sale of shares to some foreign institutional investors (FIIs) were actually structured deals. It has been discovered that at least three portfolio investors have sold all the shares they purchased in the IPO on the first day of their listing. SEBI was also looking at the role of merchant bankers in these issues. SEBI investigators have also asked stock exchanges for details of public offers and first few days' trading of Shree Ashtavinayak Cine Vision, Minar International, and Cairn India. The regulator is probing whether merchant bankers or the companies themselves helped some investors to use the FII route to corner shares without directly participating in the IPO process.

Read the complete article in The Times of India.

India Infoline, BoB enter e-broking deal

The Economic Times reports that Mumbai-based broking firm India Infoline (IIL) has entered into an alliance with Bank of Baroda (BoB) to offer e-broking services to the bank’s customers. The alliance aims to provide various products and services under wealth management, along with research and analysis services to the bank’s customers. The service has been named as ‘Baroda e-trading’. It includes multiple options to customers for trading in equity shares (online and off-line) on both exchanges, in the cash as well in derivatives segments. The tie-up will help IIL reach out to the large customer base of the bank in states like Gujarat and Maharashtra. IIL has a daily traded turnover of Rs. 1000 crores and annual traded turnover of about Rs. 250,000 crores. It has a client base of 200,000 and employee strength of over 12,000. Currently, it is earning revenues of about Rs. 1 crore daily.

VC firm ePlanet Ventures plans $500 mn fund for India, China markets

ePlanet Ventures, an early stage-focused venture capital firm is planning to raise its second global fund worth $500 mn in the next three months. The fund is looking at areas like technology in healthcare services, auto components, hospitality in addition to IT and internet. ePlanet has set up offices in Bangalore and New Delhi to focus on the emerging Indian market. ePlanet’s first $650 mn fund, in affiliation with Draper Fisher Jurvetson, has invested in India in Bangalore-based online DVD rental company Seventymm.com. In China, its portfolio companies include some big-ticket names like the Chinese search engine Baidu, flat-screen delivery commercial advertiser Focus Media, Kong Zhong and Chinese handset designer Long Cheer. ePlanet will invest in the range of $2-20 mn in companies in the country. While the average deal size could be $9-10 mn, there could a few late stage investments as well. The VC firm is looking at investments in the US, Europe and Asian countries including India, China, Korea and Japan for its second fund.

Read The Economic Times article.

Indiabulls’ overseas real estate arm raises Rs. 1200 crores from LSE’s AIM

Indiabulls Real Estate’s overseas arm, Dev Property Development has raised Rs. 1200 crores from the London Stock Exchange’s AIM market. Investors include LN Mittal, Fidelity, Capital Research and the Singaporean government having picked up large stakes in the IPO. The company's shares will start trading on the exchange from Monday. The Dev Property IPO was managed by Deutsche Bank, Citigroup and UBS. The lead marketing agent of the issue was CLSA and KPMG is the statutory auditor of Dev Property Development.

Dev Property Development will buy minority stakes in the projects of Indiabulls through a secondary sale of shares by the latter and by investing fresh equity capital in Indiabulls' projects for a total consideration of Rs. 1055 crores. Indiabulls had received Rs. 437 crores by partial sale of its stake in Jupiter Mills and Elphinstone Mills development projects. Dev Property has also invested Rs. 618 crores in subsidiary companies of Indiabulls undertaking real estate projects. It would also have the right to co-invest along with Indiabulls in its future real estate projects.

Knight Frank has valued Indiabulls' real estate projects at Rs. 21,569 crores and Indiabulls' stake in its projects at Rs. 15,125 crores. Indiabulls' real estate business has been de-merged to Indiabulls Real Estate and its shares are expected to start trading in February. All shareholders of Indiabulls Financial Services received one share of Indiabulls Real Estate for every share they held in Indiabulls Financial Services. In December, Indiabulls Infrastructure, a subsidiary of Indiabulls Real Estate, had sold 13.3% stake to LN Mittal and Farallon for a consideration of Rs. 447 crores.

Read The Times of India article.

JM Financial’s PE fund referred to CCEA; approved by FIPB

JM Financial Trustees Company’s proposal to set up a Rs. 900 crore-private equity fund has been referred to the Cabinet Committee on Economic Affairs (CCEA). The Mumbai-based trust will mobilize funds in the domestic and the overseas markets to make private equity investments in Indian companies. The Foreign Investment Promotion Board (FIPB) has already provided an in-principle approval to the fund.

The fund plans to invest in IT and IT-enabled services, manufacturing, pharmaceuticals, healthcare and media through separate schemes (and not through units of equity shares). Since such investments are not permitted through the automatic route, the application was first submitted to the Board and then referred to the CCEA. The trust has sought approval to float an offshore fund which would raise monies from high net-worth individuals, NRIs / PIOs, corporate and financial institutions from countries such as the US, the UK, UAE, Qatar, Saudi Arabia, Hong Kong and Singapore. The fund will be established in Mauritius and will be a global business license-category I company.

The proposal has attracted Schedule 5 of the Foreign Exchange Management Act (FEMA) notification of 2000. Accordingly, the fund can make the proposed investment but is restricted between equity and debt instruments in a 70:30 ratio. Also, if the FII plans to invest 100% in dated government securities, including treasury bills or non-convertible bonds and debentures, it will have to form a 100% debt fund registered with the Securities Exchange board of India (SEBI).

Article in The Economic Times.

The Blackstone Group invests $275 mn in Hyderabad-based media company Ushodaya Enterprises

The Blackstone Group, one of the world’s biggest private equity firms, has invested $275 mn in Ushodaya Enterprises Limited (UEL). UEL owns Eenadu, ETV and Ramoji Film City. The investment in the Hyderabad-based media house is touted to be the biggest in the Indian media sector. Blackstone will get board representation in Ushodaya. The investment is a part of the fundraising that Ushodaya has initiated upon. The company intends to raise $465 mn of which Blackstone has made an initial investment of $275 mn while the balance $190 mn will be by way of bank financing. The transaction is now subject to regulatory approvals from the Foreign Investment Promotion Board (FIPB) and the Ministry of Information and Broadcasting. Kotak Investment Banking was the sole investment banking advisor to the transaction.

Read the press release here.

UBS acquires the Indian arm of Standard Chartered Mutual Fund

UBS Global Asset Management has agreed to acquire Standard Chartered’s Indian mutual fund management business for a total consideration of CHF 147 mn (around Rs. 516 crores). The Indian unit of Standard Chartered Mutual Fund is India’s ninth-largest mutual fund and will add to CHF 4 bn to UBS’ assets under management (AUM). It had 4% share of the domestic market

The transaction is structured as the acquisition of a 100% interest in Standard Chartered Asset Management Company Private Limited, and Standard Chartered Trustee Company Private Limited, the manager and the trustee, respectively, of the mutual funds offered by the company. The move remains subject to regulatory approval, as well as to a price adjustment linked to assets under management at closing. The acquisition included 16 mutual funds, 10 of which were fixed income, 2 involving asset allocation and 4 in equities.

The total size of the Indian mutual fund market is just short of $100 bn and has grown by around 26% a year since 2001, and surged 62% last year.

Read the article in Business Standard.

Tata Group ups stake in TTML by 3.5%

The Tata Group has raised its stake in Tata Teleservices Maharashtra (TTML), its publicly listed telecom company. TTML provides telecommunication services in the states of Goa and Maharashtra. The group’s holding in the company has now gone up from 65.5% to 69%. Tata Sons has picked up the unsubscribed portion of TTML’s recent rights issue, thereby increasing its stake by 11%, from 7.86% equity to 18.68%. Tata Teleservices, the Tata Group’s flagship telecom company and the single largest shareholder in Tata Teleservices Maharashtra did not subscribe to the rights issue. Consequently its holding has now decreased from 46.98% to 39%. The other group companies including Tata Power, Tata Investment Corporation and Panatone Finvest have maintained their equity stake by subscribing to the rights issue.

Of late, the Tata Group has been quite in news for such corporate moves where it has raised stake in some group companies including Tata Tea and Tata Coffee. The total indirect foreign holding in TTML would also go down as Tata Teleservices, the parent company of TTML, has foreign equity holding from Singapore government’s private equity arm Temasek Holdings. The board of TTML had approved a rights issue of the size of Rs. 491.14 crores on January 12, 2007 through an aggregate of 288.91 mn equity shares at a price of Rs. 17 per share. The date of allotment of the share was January 17, 2007.

Read The Economic Times article.

S Kumar’s retail venture to go public in 3-4 months

Brandhouse Retail, the retail venture of S Kumar’s Nationwide Limited (SKNL), is planning to go public in the next 3-4 months. This follows the SKNL board decision to buy Brandhouse Retail for a consideration of Rs. 12.95 crores and then hive it off as a separate entity. The company was also open to the idea of diluting a stake to private equity investors.

Brandhouse Retail manages exclusive brand outlets for SKNL brands as well as key international brands coming to India. Brandhouse Retail is in the midst of a Rs. 400 crore-expansion which would see a total of 1200 outlets being set up by 2010. The company plans to cross 100 outlets by the end of this fiscal and 400 by the end of next fiscal. Out of the total of Rs. 400 crores needed as per the capex plans, Rs. 100 crores would be raised from internal accruals and promoters. The rest would be funded through a mix of debt and equity.

Read The Economic Times article.

REC to raise $200 mn in ECBs; StanChart gets mandate

The Rural Electrification Corporation (REC) is planning to raise up to $200 mn of yen-denominated loans from the Japanese market in external commercial borrowings (ECBs).
Standard Chartered Bank has been given the mandate for syndicating the loans.

This is the first time that REC will raise funds through the ECB route. REC had earlier raised funds from multilateral funding agencies like Japan Bank for International Co-operation (JBIC) and Germany’s KfW Bankengruppe. But this is the first time that the mini-ratna will borrow directly from the overseas market on commercial terms. The Reserve Bank of India (RBI) has recently cleared the corporation’s overseas borrowing plans.

The funds would be raised at 47 basis points (bps) above the yen-linked six-month LIBOR currently at around 0.60%. The total cost of borrowing including the administrative cost of raising the loan will be around 61 bps over yen-LIBOR. Funds raised through ECB will be used for REC’s core activity to finance and promote rural electrification projects across the country. REC also provides financial assistance to state electricity boards and state government departments.

Read the complete article in The Economic Times.

M&M fails in its bid to buy Tractorul

Mahindra & Mahindra Limited’s (M&M) bid to buy Romanian tractor maker Tractorul Brasov SA has failed due to the Romanian government rejecting debt guarantees as sought by M&M. M&M has acquired a number of tractor companies and auto-parts companies overseas in the past as it seeks to gain technology and tap bigger markets. The Mumbai-based company plans to spend Rs. 400 crores ($90 mn) over the next two years on expansion and developing new models. The company plans to make more acquisitions outside India this year.

Read Anand Mahindra’s comments in the article in Business Standard.

IFC to invest $300 mn in Indian ultra-mega projects; in talks with Tata Power

World Bank private equity arm, the International Finance Corporation (IFC), is in talks with Tata Power for providing long-term debt funding, along with other major ultra-mega power projects. Funding would be in the range of $200-300 mn. IFC is also looking at other infrastructure projects, especially in the road sector.

IFC is also looking at picking up equity stake and upper Tier-II instruments in the banking sector. It has recently invested $150 mn in ICICI Bank’s upper Tier-II bonds and $100 mn in HDFC Bank’s similar issue, and is open to more such investments in banks which will help them meet their capital requirements.

IFC already has a big-ticket exposure of over $100 mn in Tata Steel and Cairn Energy. It also has an RBI approval for raising $1 bn-equivalent of rupee funds. IFC has the fourth-largest exposure to India after Russia, Brazil and Turkey.

Read the article in The Economic Times.

Essar Group to de-list Essar Steel and Essar Oil

The Essar Group plans to de-list Essar Steel and Essar Oil following a similar move by the group on Essar Shipping last month. The proposed de-listing is aimed at gaining more flexibility in running the companies. The group has already de-listed its BPO subsidiary Aegis Communications and telecom arm Essar Teleholdings from the US and domestic bourses. The Essar Group is in the midst of organizational restructuring and might list its holding firm Essar Global with an overseas bourse, though not as of now. Six holding companies for six businesses, namely, power, steel, energy, shipping, communications and special economic zones, have been set up to handle the group’s interests across the globe.

Read the Business Standard article.

Avesthagen sells 20% stake for €25 mn

Bangalore-based integrated life sciences company Avestha Gengraine Technologies Limited (Avesthagen) has closed Series C of private equity fundraising of around €25 mn by divesting 20% equity to external investors. The investment values the company at € 115 mn (Rs. 667 crores). The investors in the company are Fidelity International (10%), the Limagrain Group of France (5%), Daninvest of the Danone Group (4.57%), and Bennett, Coleman & Company Limited (2.4%). The total foreign investment in the company is now over 31%. The existing investors of Avesthagen include ICICI Ventures, Cipla, Godrej Industries, Tata Industries and bioMerieux. The company has also commenced preparations for its initial public offering scheduled to hit the market by mid-2008.

The company commenced its operations as an agri-biotech company in 2001 and then moved on to become a healthcare technology company, pursing its vision of convergence of food, pharmaceuticals, and population genetics, leading to preventive personalized medicine. The other activity of the company has been agri-biotech product development of scientifically validated bioactive nutraceuticals, derived from Indian medicinal plants, as well as the development of bio-similar drugs. The company has four strategic business units: bio-pharmaceuticals, food for medicine (bio-nutritionals), seed for food (agri-biotech) and science and innovation. The company registered Rs. 1.1 crore in profit and Rs. 18 crore revenue in 2005-06.

The funds will be used for Avesthagen’s infrastructure expansion plans, including setting up of manufacturing units and research and development laboratories, and acquisition of technology companies to scale up production and marketing.

Read the article in Business Standard.

ACC exits Everest Industries; sells 8.2% stake in open market

ACC has sold off its residual 8.2% equity stake in Everest Industries in the secondary market, thus finally exiting from its majority equity holding in the company. The stake was put up for sale by Holcim following its acquisition of ACC in India two years ago. ACC had earlier tried to sell its 76% stake in the company to the Adani Group, who had also announced an open offer to acquire further stake as required by the takeover code. However, the offer failed to materialize due to Everest’s valuation-related issues. Finally, about a year back ACC sold off 50% stake to Eternit Finvest managed by the Mrinalini Trust of Gujarat Ambuja’s Narottam Sekhsaria. The stake sale would have fetched about Rs. 10-15 crores to ACC based on the market price.

Everest Industries is a building materials manufacturer and the oldest player in the roofing industry. The company is in the asbestos-based roofing materials business and has a turnover of about Rs. 250 crores. It sells its roofing products under the popular Everest brand while its interior products are sold under the brand E-Board.

Article in The Economic Times.

Saturday, January 27, 2007

Citigroup VC may invest $15 mn in AnandRathi

Citigroup Venture Capital (CVC) is in talks to acquire 10-15% stake in Mumbai-based securities and wealth management firm AnandRathi Securities for around Rs. 70 crores ($15 mn). AnandRathi proposes to come out with a public issue in the next financial year. CVC is in the fray along with a couple of more private equity funds and the deal is expected to be closed within the end of the current fiscal.

This is the first time in 12 years since its establishment that AnandRathi is expected to receive private equity funding. The company offers the entire gamut of financial and advisory services including wealth management, investment banking, corporate advisory, brokerage and distribution of equities, commodities, mutual funds and insurance. Besides having a pan-India presence with 300 offices, it has international presence through its offices in Dubai and Bangkok. AnandRathi also runs a Rs. 150-crore realty fund focusing on partnering with developers in Tier-II cities to cater to the growing demand for quality residential space in these cities and also earmark some investments in rental income yielding office properties. AnandRathi is also planning to launch an overseas $75 mn fund.

Read the Business Standard article.

Sasken Technologies, Tata company form auto electronics JV

The Economic Times reports that Tata AutoComp Systems Limited (TACO), a Tata Group company, and Bangalore-based embedded communications solutions firm Sasken Communication Technologies Limited has announced a JV partnership to design, develop and market automotive electronics products for the global market. The JV, TACO Sasken Automotive Electronics Private Limited, would address both OEMs and aftermarket It will initially focus on automotive electronics products in the areas of telematics, infotainment and occupant convenience. The company will start its operations from a state-of-the-art product development centre in Bangalore.

Sintex to buy European firm for €40 mn

Plastics and textiles company Sintex Industries is close to acquiring a European company for €40 mn before March-end. The Company has declined to divulge the name of the company citing the confidentiality the company has to maintain till the deal is concluded. The company is unlisted and is into the electrical engineering and auto ancillary capabilities having multiple locations in Europe having manufacturing facilities in Italy, Germany and France. Sintex is also in talks with four other firms, three in Europe and one in the US. The acquisition is a strategic move as the foreign firm has a pan-Europe presence with good clientele, many of whom are from Fortune 500 companies.

Sintex is also looking out in the domestic market and is in the process of acquiring electric engineering and auto ancillary based companies. The company seems to be now interested in picking up some local companies to fuel its growth. In its recently declared third quarter result, the company has seen an increase in its net income earning by 35%, while registering net income of Rs. 284.6 crores for the Q3 FY06-07 compared to Rs. 210.3 crores in the year-ago period. The net profit rose by 27% from Rs. 20.4 crores in last Q3FY05-06 to Rs. 25.9 crores in current Q3FY06-07.

Read the article in Business Standard.

Bennett Coleman buys 15% in Kanpur-based UPTEC for Rs. 5 crores

Bennett, Coleman & Company Limited has invested Rs 5 crore at Rs 1,714 a share for a 15% stake in UP-based IT company UPTEC. UPTEC was established in 1993. Since then it gave dividends regularly till 2003, after which it skipped paying for three years, ploughing back the profits in the company. It resumed paying dividends this year. Its turnover is likely to cross Rs. 30 crores this year with revenue coming from IT training, hardware & networking solutions, content development, and software services. Its current student strength is about 10,000 and 50,000 students have passed out of its ten centres in Lucknow, Kanpur, Allahabad, Varanasi and Noida. The latest offering from UPTEC is e-learning and e-testing. The company is testing its interactive e-learning software developed in-house, and it will be launched this summer in at least three subjects. All the company’s courses have won the ISO 901-2000 certificate for all education centres and allied services, including management education.

Read the article in Business Standard.

Sabre Capital to acquire a company each in IT, engineering sectors

Sabre Abraaj Private Equity, the 50:50 JV between Sabre Capital Worldwide and Abraaj Capital, is in the process of acquiring two firms in the IT and engineering products space that would be finalized in the next two months. The firm has declined to name the investee companies. Sabre Abraaj Capital has recently launched the $300 mn Sabre Abraaj India Private Equity Fund I and invested around $16 mn in Hyderabad-based Ramky Infrastructure (See Related Post). The fund is scouting for turnaround opportunities; it is a stated strategy of the fund to first acquire the companies and then work out the strategy to achieve turnaround. The fund is targeting sectors like infrastructure, retail, auto components, leisure and entertainment and medical devices as potential sectors for venture fund investments.

Read the article in The Economic Times.

Scandent to sell stake in Cambridge Solutions; Apollo, Fidelity, EDS approached

The Economic Times reports that the Scandent Group is selling its majority stake in Cambridge Solutions. Investment bank Lehman Brothers is scouting for buyers for Cambridge which has a large BPO operation in the US. Some US-based funds such as Apollo, Fidelity and strategic players like global IT major EDS have been approached. An information memorandum has also been drafted for the prospective buyers. Cambridge is expected to fetch a valuation of anything above $300 mn, making it the second largest domestic deal in the BPO industry, after the $500 mn sale by General Electric of its 60 % stake in India’s biggest BPO outfit Genpact to Oak Hill Partners and General Atlantic in 2004. At present, the group of original promoters-this include serial entrepreneur Ramesh Vangal, former Pepsico CEO Christopher Sinclair, McKinsey honcho Rajat Gupta, US-Canadian Bronfman family of Seagram fame, the Chanderia family and current CEO Satyan Patel-holds 59.15% stake in Cambridge.

Wednesday, January 24, 2007

Lehman Brothers gets government approval to trade in G-Secs

Lehman Brothers Securities has obtained permission from the Foreign Investment Promotion Board (FIPB) to trade in government securities. The financial sector giant plans to invest Rs 225 crore here through a number of downstream subsidiaries, which will directly trade in securities. The downstream subsidiaries of Lehman Brothers will also take up underwriting, merchant banking and other financial services, apart from functioning as primary dealerships (PDs) for trading in government securities.

Read The Economic Times article.

IFC to invest $600 mn this year

International Finance Corporation (IFC), the private equity arm of the World Bank, intends to invest around $300 mn for the year ending June 30, 2007, reports The Economic Times. For the year ended June 30, 2006 IFC had invested $ 410 mn. The financial sector accounted for the largest chunk of IFC’s exposure in the first half of its financial year (July to December). Over 70% of IFC’s exposure will be through the debt route and the rest through equity stakes in Indian companies. The biggest chunk of $150 mn went into ICICI Bank’s Tier-II bond issue announced in October. Another $100 mn was invested in HDFC Bank’s Tier-II bond issue. Infrastructure is one of the priority areas for IFC, which is now keen on funding ultra-mega power projects. Healthcare is another focus area of the corporation.

CLSA buys 10.92% stake in Sanghvi Movers

Business Standard reports that foreign fund CLSA Capital Partners has bought 10.92% stake in mid-cap Sanghvi Movers, a flagship of the Sanghvi Group, one of Asia’s largest crane-hiring companies. The board of Sanghvi Movers has allotted 8.8 lakh equity shares of the company at Rs. 825 a share, aggregating to Rs 72.6 crores to Goldpeak, a subsidiary of Aria Investment Partners III, which is one of CLSA Capital Partners’ funds, on a preferential basis.

23 foreign investment plans cleared by FIPB; plans included those of Reliance Communications, Lehman Brothers

The Foreign Investment Promotion Board (FIPB) approved foreign investments worth Rs. 5910.66 crores on Tuesday, reports The Economic Times. Of this amount, the major chunk is expected to flow into Reliance Communications by way FII investments worth Rs. 5400 crores. The company will raise this money through ADRs and GDRs worth $1.2 bn. The government also approved US investment bank Lehman Brothers' planned investment of Rs. 225 crores in its Indian arm. Velcan Energy, a French power generation company has also got an approval to invest Rs. 200 crores in the Indian renewable energy sector. The company will now convert its operating company in India to an operating-cum-holding company. The FIPB has also given permission to Mauritius based Horse-Shoe Capital to invest Rs. 45 crores to make downstream investments in companies engaged in providing telecommunication infrastructure. The other approvals include a nod to Hong Kong-based Haier International for marketing and distribution of Haier brand mobile phones. The company plans to set up a joint venture with a foreign equity of 51% for single-brand retail. The government has also cleared the application of US-based Bloomingdale International, which will allow the company to set up a chain of five-star and three-star hotels in the country. The company will invest Rs. 8.6 crores as per the application. Singapore-based Sincere Watch has also got an approval to set up a wholly-owned subsidiary to set up duty free shops at airports, seaports and SEZs. Bank of Muscat has also got a go ahead from the board to invest Rs. 10.92 crores in an NBFC in India (See Related Post). Other approvals include Delta Plus’ plans to set up a JV with 90% foreign equity for warehousing and export activity. Deutsche Post international has been permitted to raise its stake from 49% to 51% in DHL Danzas, which is engaged in carrying on business of transportation, air freight and ocean freight.

Apollo to launch $2bn Indian real estate fund

Apollo, the US private equity group, is joining forces with SUN Group, an Indian investment company, to launch India’s biggest-ever real estate fund. Apollo and SUN have together raised $630 mn of equity, which, with gearing, gives them $2 bn of spending power in the Indian market. The launch is the latest in a string of new vehicles aimed at the real estate market in India and US, Middle Eastern and local funds are looking to take advantage of India’s fast-growing GDP and perceived lack of good quality infrastructure. The SUN Group, owned mainly by the Khemka family, has a range of investments across India and the former USSR. The joint venture, SUN-Apollo India Real Estate Fund, has a remit to invest across the whole spectrum of residential and commercial property in the major Indian cities.

Read the FT Alphaville.com posting.

CVC International invests $33 mn in infrastructure company Indu Projects

Citigroup Venture Capital International, the private equity arm of Citigroup, has invested Rs. 150 crores ($33 mn) in Hyderabad-based infrastructure and real estate player Indu Projects Limited. Indu Projects has placed 9% equity at Rs. 1214 per share, and post-issue, the company’s equity stands at Rs. 13.69 crores while its total valuation stood at Rs. 1650 crores. DSP Merrill Lynch was the financial adviser to the transaction. The proceeds of the private placement are intended to improve the company's net worth and fund projects in the commercial and residential space that include construction of 28 mn sq. ft. of plinth area in Hyderabad, Bangalore, Pune, Coimbatore, Chennai and Nandyal (Andhra Pradesh). The company has over 30 mn sq. ft. of real estate development under way across the country.

Read the Business Standard and Moneycontrol.com article.
Related Post: IL&FS, Sabre Abraaj invest Rs. 125 crores into Ramky Infrastructure

Champagne Indage buys South Australia-based wine maker Tandou Wines

Indian wine company Champagne Indage is buying the wine business and winery of Tandou Wines of South Australia for an undisclosed amount. The winery has a capacity of 3 mn cases (27 mn litres) annually. Champagne Indage produces 8 mn litre wines annually. Both the companies have signed an agreement which will be finalized in seven days.

The Australian wine maker will be renamed after the acquisition, likely to be Indage Australia Limited. Champagne Indage plans to diversify into foods and confectionery business and has set up a subsidiary, Seabuckthorn Indage Limited (SIL), to meet this end. Champagne Indage will hold 52.63% equity in this company which currently markets the Leh Berry brand fruit nectar, and has plans to get into jams and fruit juices. The company is also talking to a couple of players for third party manufacturing of its biscuits and jams.

Read the Business Standard and The Times of India articles for more details.

Tuesday, January 23, 2007

Goldman, Unitech to set up real estate SPV

Global investment bank Goldman Sachs and real estate company Unitech are jointly setting up a special purpose vehicle (SPV) for investments in the real estate sector. The special purpose vehicle is expected to have a corpus of Rs. 900 crores. Goldman Sachs is likely to have 33% equity valued at Rs. 300 crores. The balance Rs. 600 crores will be brought in by Unitech, in the form of cash as well as land bank.

Unitech is particularly bullish on developing real estate projects in the National Capital Region (NCR), areas around Mumbai, near Bangalore’s under-construction international airport and some areas in close proximity to various ongoing special economic zone (SEZ) projects. The SPV may also look at investing in greenfield residential and commercial projects in tier II and III cities. The deal is expected to be signed in the next one month.

Unitech is the largest listed real estate company in India with a market capitalization of Rs. 37,406.62 crores. The company has real estate projects, both residential and commercial, across the country. Unitech is also developing two SEZs in West Bengal and Haryana. Last year, Goldman Sachs had announced that it would make investments of $1 bn in private equity, real estate, private wealth management and other businesses in India for its institutional clients in the next couple of years. As part of its India strategy, Goldman Sachs had announced that it will start its own investment banking, asset management, and securities businesses. The financial services giant recently got a license from SEBI for its retail broking operations.

Read The Economic Times article.

UK-based Argos, K Raheja may form retail JV

Argos is signing a JV deal with the K Raheja Group to open stores in India. Argos is Britain’s leading catalogue retailer and sells general merchandise and products for the home from over 670 stores throughout the UK and Republic of Ireland, online and over the telephone. In the last financial year, Argos sales topped £3.8 bn. Argos serves over 130 mn customers a year through its stores and takes 4 mn orders either online or over the phone. Argos is owned by the Home Retail Group. Real estate and retail major, the K Raheja Group owns Shoppers’ Shop, a department store chain and HyperCity, a fledgling hypermarket chain.

Read more details in The Economic Times.

Government to notify 5% of pension funds to be invested in stocks

The Central Government would notify an interim investment pattern for funds collected under the New Pension Scheme (NPS) that will allow 5% investment of the corpus in the capital markets. Under NPS, the Centre and the states have collected about Rs. 1500 crores till date. The interim scheme would also have a provision to invest all the NPS money in government bonds. The proposal has been backed by 19 states.

The initiative has been designed so to allow more funds to flow into the capital markets and provide an opportunity for better returns to NPS subscribers. The NPS corpus earns only 8% interest at present. The government plans to appoint fund managers to handle the investments and the first one is likely to be from the public sector. The decision is being opposed by the Left parties and Left-ruled states of West Bengal, Kerala and Tripura who have rejected the proposed investment pattern. They feel that subscribers should not be subjected to risks associated with stock market investments.

Read more details in The Economic Times.

Wipro on the lookout for acquisition of BPO firms in $20-50 mn range

Wipro is looking for buyouts of up to $50 mn in healthcare, travel, and finance and accounting space. Within the BPO space, after Spectramind, the company now wants to look at acquisitions in the range of $20-50 mn, particularly for transaction processing work. The company wants capabilities in two verticals, namely, healthcare and travel, and amongst the horizontals the targets are finance and accounting (F&A) as well as procurement.

Wipro had acquired Spectramind eServices in 2002 for over Rs. 400 crores. At that time, Spectramind’s annual business was $11 mn with 2500 employees. In case of healthcare and travel, Wipro is looking at the US market for an acquisition. For other segments, the acquisitions could also be in the Indian market.

At present, telecom and finance related transaction processing work accounts for 60% of Wipro BPO’s overall transaction processing revenues. The BPO unit operates in verticals, including banking and financial services, insurance, health and life sciences, telecom, and travel and transportation. Its horizontal offerings span finance and accounting, procurement, loyalty services and HR services. For the third quarter of the current fiscal, Wipro BPO unit reported revenues of Rs. 235.8 crores.

Read The Economic Times article.

IL&FS, Sabre Abraaj invest Rs. 125 crores into Ramky Infrastructure

Hyderabad-based Ramky Infrastructure Limited has received private equity funding of Rs. 125 crores from IL&FS Investment Managers (IIML) and UAE-based Sabre Abraaj Private Equity Fund I. Rs. 75 crores was put in by Sabre-Abraaj, while Rs. 50 crores was infused by IIML. Members from the two companies will join the board of Ramky. The investment of Rs. 125 crores amounts to 13.5% of equity placed with the two investors while the remaining 84.5% is held by the promoters. About 1.1 mn shares of Ramky Infrastructure have been placed with the investors at a price of about Rs. 1146 per share, taking the EV of Ramky at Rs. 925 crores.

Ramky Infrastructure has been undertaking several BOT projects including roads, highways, industrial parks, irrigation canals and residential projects. The order book position of the company stands at Rs. 2300 crores. The investment will be used to bid for larger construction projects, investment in BOT projects and working capital requirements. The company will also look at the option of entering the capital markets in the next one year to raise funds.

IIML’s investment in Ramky is part of its $1 bn funds planned for the year. Of the $1 bn planned for investment, at least $250 million has been invested in infrastructure firms. This is also the first investment of Sabre Abraaj Private Equity, a 50:50 JV between Sabre Capital Worldwide, Inc. and UAE-based Abraaj Capital. Recently the two investment firms launched the Sabre Abraaj India Private Equity Fund I and the first recipient of funds is Ramky (See Related Post).

Read The Economic Times article.

NEA-IndoUS Ventures invests in India

NEA-IndoUS Ventures has made two investments in India. The firm has put in money in the proposed Indian operations of US-based mobile payments company Obopay and personalized search engine firm Minekey, which was incubated in IIT-Kharagpur. NEA-IndoUS Ventures is being led by Vinod Dham, of Intel Pentium fame, and Silicon Valley serial entrepreneur Vani Kola. While financial details on the investments were not given, sources said that they run into a few million dollars.

The investments have been made from the India specific fund currently being raised by the firm, reportedly in the $105-150 mn range. It is partnering with US VC firm New Enterprise Associates (NEA) in branding and sharing of best practices. The two will also partner for joint investments in BPO / KPO large deals.

The investment focus of the fund will be on technology and IT-enabled services for early and mid stage companies, in sectors like mobile services, digital media and content, telecom & enterprise, BPO/KPO, semiconductor, software products & services, education, engineering design services and healthcare. A majority of the investments would be in $1-10 mn range.

Read The Economic Times article.

Inter-Continental Exchange eyes ICICI Bank’s NCDEX stake; LSE, SGX approach Inter-connected Stock Exchange for stake

Inter-Continental Exchange (ICE), an exchange for energy derivatives wants to buy ICICI Bank’s stake in the National Commodities and Derivative Exchange (NCDEX). ICICI Bank is one of the promoters of NCDEX, along with the National Stock Exchange (NSE), Life Insurance Corporation (LIC) and agricultural refinance bank, the National Bank for Agriculture and Rural Development (NABARD). ICICI Bank is reportedly looking for a buyer for all or part of its 8% stake.

This comes in the wake of a massive consolidation in the domestic stock exchanges. Already, The New York Mercantile Exchange (NYMEX) is discussing the possibility of acquiring equity in the Multi-Commodity Exchange (MCX). The NSE has brought in New York Stock Exchange (NYSE) as a partner with 5% equity. Meanwhile, the Bombay Stock Exchange (BSE) is discussing a strategic partnership with Deutsche Bourse, SGX and NASDAQ. BSE is also negotiating for a stake in the Ahmedabad-based on-line exchange NMCE (the National Multi-Commodity Exchange) to gain a presence in commodity futures trading and improve its valuations. NMCE, in turn, may issue new shares to BSE to get additional funds for expansion.

Read the Business Standard article.
See Related Posts:
NYSE, Goldman Sachs, General Atlantic, SAIF to buy 26% in NSE
Deutsche Borse, Singapore Stock Exchange in race to acquire BSE interest

In a related development, the London Stock Exchange (LSE), Singapore Stock Exchange (SGX) and some top private equity players have shown an interest in The Inter-Connected Stock Exchange of India (ISE), an exchange floated by a group of small exchanges, which is fast completing its revival strategy to attract global peers. The exchange will soon be presenting a proposal to SEBI about the future plans and product initiatives of the exchange. ISE has received a one-year extension to complete its corporatization till September 15, 2007. There is a possibility for this to happen as the SEBI plans to provide a third stock exchange platform to investors, especially for small and medium enterprises, which are located in tier-III or tier-IV cities. The valuation process of the exchange is expected to be over within three to four weeks. The ISE is promoted by 13 regional stock exchanges, which include bourses from Bangalore, Cochin, Bhubaneshwar, Hyderabad, Jaipur, and Mangalore. ISE has a network that covers nearly 134 cities across 25 states.

Read the Business Standard article.

JSW Energy to acquire mining company in Indonesia

JSW Energy, an unlisted subsidiary of the JSW Steel Group, is close to acquiring a significant equity stake in an Indonesian mining company. The move is in line with the company’s strategy of owning coal mines and lowering operating costs. JSW Energy is believed to have completed the due diligence and would complete the transaction soon. The company has declined to comment on specifics such as the percentage of equity and the size of coal reserves. Indonesia is known for having huge reserves of thermal coal used in power plants. The move is part of JSW Steel’s plans to meet raw material needs. Also on the anvil for a possible buyout is a coalfield in Mozambique and steel units with manufacturing capacities of 1-2 mn tonnes in Europe or North America. JSW is also eyeing coal assets in other African nations. With a view to facilitate its overseas buyouts, JSW has floated a subsidiary in the UK with a capital of £1 mn. On Monday, the board decided to further capitalize the UK subsidiary, set up to acquire steel companies overseas, by raising it to £7.5 mn. During this quarter, the company also registered JSW Natural Resources in Mauritius to be the pivot to acquire foreign coal assets.

The company is only looking at smaller capacities abroad. It is looking at 3-4 proposals in the downstream and service centre sectors that can service the requirement of global auto majors in the advanced markets. It is also a suitor for Sesa Goa, where Japanese trading major Mitsui plans to sell 51% and Mittal Steel is reported to be among the suitors (See Related Post).

Read the articles in The Economic Times and DNA Money

Reliance Capital picks up 31% stake in logistics firm BLR

Reliance Capital has picked up a 31% stake in BLR India, one of the top five logistics companies in India, for an undisclosed amount. Reliance Capital already owns a 44% stake in the courier and cargo business of DTDC.

BLR offers manifold transport and logistics services and is among the largest players in corporate surface transportation. It owns over 250 vehicles including a truck fleet of more than 130. It contracts another 800 on a daily basis. It has a network of more than 50 offices across the country.

BLR’s specialized services include over-dimensional cargo (ODC) and export-import transportation as well as government-approved bonded warehousing and bonded trucking services. The company is expected to use the funds raised through this transaction for investing in warehouses, trucks and trailers. Tower Capital was the investment advisor to the deal.

For more details, read DNA Money.

Monday, January 22, 2007

Providence Equity Partners opens offices in Hong Kong and India

Providence Equity Partners, a US-based private equity firm, will be opening offices in Hong Kong and India. The Hong Kong office will be led by Andrew Rickards, CEO of investment bank Rothschild & Sons in Asia, as its managing director and will lead the firm's Asian investments. He will be joined by Thura Ko, an assistant director at Rothschild Asia. The New Delhi office will be headed by Biswajit Subramanian, a managing director of Providence Equity in London who joined the firm in 2000. Subramanian led Providence Equity's acquisition of a 15% stake in Indian wireless operator Idea Cellular Limited in October 2006. Providence invests mainly in the media, telecom and technology sectors, and is based in Providence, Rhode Island.

Read the press release here.

UTI mandates banks for $250 mn

UTI Bank has mandated Citigroup and Deutsche Bank as lead managers for raising $250 mn via three-year floating rate notes, a source close to the deal said on Monday. Investor presentations will take place in Singapore on Tuesday. Timing of the issue launch and bond pricing will be decided subject to market conditions (Source – The Economic Times).

Rajesh Exports in acquisition talks with US jewellery retail chain

Jewellery manufacturer Rajesh Exports is in advanced talks to acquire a string of jewellery retail stores abroad for $100-200 mn. The company is working on a complex deal where it is going to acquire a mid-size jewellery chain in the US apart from snapping standalone local jewelers in about 15 countries across North America, Europe, Asia and Australia.

The US jewellery chain, with which Rajesh Exports is in talks, has about 80-100 stores spread across the country and the deal is expected to be valued at around $50-100 mn. This would include its in-house jewellery brands. Rajesh Exports is looking to acquire a majority stake in this chain. This deal is expected to be closed within the next 4-6 weeks. The acquisition of the US-based chain by Rajesh Exports is part of a game plan of becoming a large global retailer of jewellery. Other countries where negotiations are currently on include the UK, Canada, France, Germany, Switzerland, Thailand, Malaysia, Australia, Singapore, the UAE, Kuwait, Oman and New Zealand. The company would acquire a handful of jewellery retail outlets in each of these countries spread across 35 cities totaling about 50-60 stores. This strategy is similar to the company’s ongoing retail expansion in India where one of its retail brands, Shubh, is modeled on similar lines by bringing local jewelers in different cities under its umbrella. All the international retail outlets would be under its wholly-owned retailing subsidiary, 24K Retail. The acquisition will be financed through a mix of debt and equity. The company has already announced that it is planning to raise about $150 mn from overseas investors, which will part-fund the acquisitions.

Read The Economic Times article.

3i, Cisco, Oman Investment Fund invest $152 mn in Nimbus for 28% stake

Nimbus Communications, a media company with interests in general entertainment and sports, received private equity funding of $152 mn (Rs. 552 crores) for a 28.5% stake in the company. Private equity firm 3i, technology MNC Cisco and Oman Investment Fund (OIF) were the investors. Deutsche Bank and Americorp Ventures already hold stakes in Nimbus. The deal is being billed as the largest-ever private equity investments in the Indian media and entertainment sector. The advisors in this private equity transaction were Euromax Capital and Enam Consultants.

The private equity investment in Nimbus would be through compulsory convertible debentures with a likely conversion scheduled prior to the company's listing. This would be the final round of private equity investment before the company gets listed, which could be done within three years. The shareholding of the promoters would come down to between 40% and 44%, currently standing at 54%.

Nimbus has earlier said that it is interested in expanding its sports facilities and also the technology platform for future launches. Film distribution is another growth area. The money will be utilized to expand the company's international sports business and diversify into football and golf. A part of the funds will also be utilized to finance Indian language films, international film production and distribution, developing digital content for wireless and IPTV platforms and to expand the company's broadcasting operations.

3i is one of the largest UK-based private equity funds, managing close to $10 bn globally. This is the second round of investment for 3i in Nimbus. In 2005, the fund had invested $45 mn for a 33% stake in the company. In the current tranche, it has put in $30 mn for 6.5%. Early this month, 3i invested $22 mn in Indian digital cinema chain UFO Moviez (See Related Post). OIF, promoted by Sultan of Oman, has invested $75 mn for an 18% stake while Cisco got 4% for $20 mn. Cisco's investment is based on its strengths in IP television, a platform that Nimbus plans to foray into, while OIF will help Nimbus boost its presence in the Middle East. Nimbus' current revenues stand at $310 mn, up from $70 mn when 3i first picked a stake in it. Over the last five years, the company has received close to $200 mn (Rs. 900 crores) in foreign investments.

Read the articles in The Economic Times – 1 2.

Jet Airways seeking $400 mn via private equity

Jet Airways is in talks with private equity firms to raise $400 mn (over Rs. 1760 crores) through qualified institutional placements (QIPs) for its aircraft acquisition plans. The QIPs will be used to improve the airline's balance sheet as well as raise 15% of the cost of its $2.5 bn bill for 20 wide-bodied aircrafts for international operations and 10 Boeing 737s for domestic operations. The rest of the bill will be funded by debt.

The QIP could dilute the promoters’ equity by 10%, who currently hold 80% in the airline. The airline is also considering a follow-on issue or a combination of QIP investments and equity expansion. Interestingly, the airline has dropped plans for a $500 mn FCCBs issue. The airline would extend its international operations to North America, Europe, Africa and Asia once it acquired the wide-bodied jets. Besides its $2.5 bn acquisition programme, Jet Airways also plans to buy 10 Boeing 787-8 Dreamliners. Deliveries are scheduled between July 2011 and December 2012.

Read the Business Standard article.

The Hinduja Group seeks management control in buying Pirelli’s stake in Telecom Italia

The Hinduja Group has made it clear that it will seek management control in Telecom Italia if it bids for Italian tyre and real estate major Pirelli’s stake in Italy’s largest telecommunications operator. Though Pirelli holds the largest block of shares in Telecom Italia, acquisition of that stake alone will not give the Hindujas majority control. However, given the widely-held structure of Telecom Italia’s shareholding, it may give them management control. Pirelli owns 80% of Telecom Italia’s holding company Olimpia, which has an 18% stake in Telecom Italia. Telecom Italia is Europe’s fifth largest telecommunications group with sales of nearly $30 bn and market capitalization of $77 bn. Back-of-the-envelope calculations put the acquisition cost for Pirelli’s stake in Olimpia at $12 bn. The race for Telecom Italia is hotting up with Sistema, the Russian billionaire industrialist Vladimir Yevtushenkov being the third to join the fray. US private equity firm Blackstone also expressed an interest in picking up a stake in Telecom Italia two months ago, and several others are expected to join the bidding bandwagon soon.

Read The Economic Times article.
Related Post: The Hinduja Group interested in majority stake in Telecom Italia

Credit Suisse to raise a $1bn fund to tap Indian realty

Credit Suisse, the Zurich-headquartered financial powerhouse, is planning a dedicated $1 bn fund for investing in the booming real estate sector in India, to be announced in the next financial year. Already, US-based investment banking giants Morgan Stanley and Goldman Sachs have invested heavily in the real estate market in India, with Morgan Stanley Real Estate Fund recently having struck the largest real estate investment deal worth Rs. 675 crores with Mumbai-based Oberoi Constructions. Goldman Sachs is also planning an investment of $1 bn. Credit Suisse’s $1-bn investment in real estate will be brought in a phased manner by 2010 and will focus on commercial space. High on its priority list are large-format retail malls, two-star and three-star business hotels, healthcare and multi-use office-cum-residential complexes. Sources said the fund will primarily pick equity in ongoing big-ticket projects or those looking for second round of funding to complete their partially operational projects. The fund is unlikely to park money in start-up projects. The fund is also keen on acquiring management stake in some projects post-completion.

Read more in The Economic Times.

Private funds invest Rs. 146 crores in Provogue

Private equity funds have invested Rs 146.25 crores in retailer Provogue. Fidelity, New Vernon, Blackstone, Genesis Capital, Artis Capital and Liberty International have picked up 3.25 mn preference shares at Rs. 450 per share. Provogue's promoters are also subscribing to 1.8 mn warrants at the same price.

The new allotments will push up the company's total capital to 21.24 mn shares. In this, foreign funds will now hold around 15.30%. Promoters and friends will hold 47.34% and 18.31% diluting their stakes from 51% and 24%, respectively. The foreign investment comes with a one-year lock-in. It comes on the back of JV partner, Liberty International, investing Rs. 202.5 crores for a 25% stake in its retail infrastructure subsidiary, Prozone-Liberty.

Read the article in The Times of India and The Economic Times.

Norwest Venture Partners to acquire IT companies in India

Norwest Venture Partners (NVP), the California-based venture capital firm that recently invested $20 mn in Indian KPO firm Adventity, is scouting for buyout opportunities in the Indian IT space. Though NVP does not have a dedicated India fund, it intends to invest $300 mn in India over the next three years, and is targeting companies in the range of $25-30 mn operating in the services and product development space for acquisitions.

The fund currently has invested $50 mn in four IT companies in India and is planning to invest in other 10-15 companies over the next 2-3 years. Apart from Adventity, NVP had earlier invested $13.8 mn in Persistent Systems and another $10 mn in social networking site Sulekha.com. It also invested in online travel portal Yatra.com along with Reliance Capital and the TV18 Group.

NVP is working on a hybrid model, where companies across geographies can be merged together depending on the synergies. Even for its existing portfolio companies in India, the fund is open to merging it with any of its existing investee companies. Though internationally, NVP has made investments in a number of industries, in India, the fund will invest in semi-conductors, consumer internet and media companies.

Read The Economic Times for comments from Mr. Promod Haque, Managing Partner-Norwest Venture Partners.

India Power Fund to be operationalized by March 2007

India Power Fund, a venture capital fund of Power Finance Corporation, catering to the need of India’s growing power needs will be operationalized by the end of the current financial year. The fund has been in the pipeline since February 2004 when it was announced by the NDA government to meet the shortfall in equity needs for the power sector.

The Indian power sector needs an investment of more than $100 bn to add 68,000 MW of additional generation capacity, besides transmission and distribution network by 2012. Life Insurance Corporation (LIC) is already participating as one of the partners contributing to the fund. The power ministry has sought an income-tax exemption of 20% of the total contribution for five years to the fund as it feels tax break will help mop up resources.

Read The Economic Times for more details.

Easier funding norms contemplated by RBI for India Inc.’s foreign acquisitions

Business Standard reports that the Reserve Bank of India (RBI) in its plans to liberalizing regulatory norms for outbound investments, is considering allowing Indian companies to directly give loans to their step-down companies for overseas business expansions. A step-down company is a subsidiary of a holding company abroad which is set up by Indian entity. At present, an Indian corporate can extend loans only to a company in which it holds direct stake.

The RBI may ask banks to do the diligence in such matters of extending loans to such ‘step-downs’. The fund (debt) will have to be within the existing limit of 200% of the net worth of the Indian company. Funding the operating company through holding company has attendant complexities and direct assistance is expected to save cost and make transaction transparent.

These issues were discussed by RBI deputy governor Shyamala Gopinath while addressing a conference on cross-border acquisitions organized by the Bombay Chamber of Commerce.

Foursoft buys Danish software company Transaxiom for $10 mn

Four Soft (4S), a software solutions provider for transportation and logistics vertical, acquired 100% of the Denmark-based Transaxiom Holding A/S, a global provider of transportation and logistics solutions for approximately $10 mn (around Rs. 45 crores). The transaction value will be in a cash-and-stock deal with the payouts happening over the next three years based on performance. The definitive agreement has been signed between the two companies. With this merger, Four Soft consolidates its leadership position within transportation and logistics industry. In addition, the merger will augment 4S’s current domain and technology competence and expand global presence in Scandinavia, Australia and Hong Kong markets (Source – Business Standard).

Friday, January 19, 2007

Unichem Labs to acquire Brazilian drug company

Pharma company Unichem Laboratories Limited is set to acquire a Brazilian drug company for about Rs. 110 crores. Unichem is at an advanced stage of negotiations with a firm that has a marketing network, a few product approvals, a warehouse and a quality control division.

The paper did not name the target firm but said the acquisition would be funded through internal accruals and debt. Unichem already has a presence in Brazil through a subsidiary, Unichem Farmaceutica do Brasil, but the deal would be struck by the parent and not the subsidiary.

Brazil's pharmaceuticals market, estimated at about Rs. 386 bn, is growing at 32% a year.
Unichem is also planning an acquisition in the Indian market. It is on the lookout for a formulations company that has less than 20% brands clashing with Unichem’s portfolio.

In December, Unichem bought out the remaining 40% stake in UK-based subsidiary Niche Generics Limited, making it a wholly-owned unit.

Read the articles in The Economic Times – 1 2.

Ranbaxy Labs to set up SPV for Merck Generics bid

Ranbaxy Laboratories is considering using the frequently-employed technique of taking the special purpose vehicle (SPV) route for launching a bid on Merck’s generic business. If Ranbaxy decides to take the SPV route, the debt and private equity funds as well as Ranbaxy’s own funds will be infused into the SPV.

Merck is looking to sell its generics division, in a deal that could be valued at $5.2 bn. The generics business clocks revenues of around $2.5 bn and if Ranbaxy is able to acquire it, the Indian company’s revenues could nearly triple to around $3.8 bn (See Related Post). The bidding process and due diligence are expected to begin in February. Leading generic companies such as Teva and Sandoz and private equity majors such as Blackstone and KKR could be in the race as well. Ranbaxy has in the past secured shareholders approval to raise $1.5 bn out of which it has already raised $440 mn through FCCBs. Ranbaxy has also taken a 14.9% stake in Hyderabad-based Krebs Biochemicals and Industries for around Rs. 9 crores (See Related Post).

Read the article in The Economic Times.

Petroleos De Venezuela may buy big stake in MRPL refinery

Venezuela’s state-run oil company Petroleos De Venezuela SA (PDVSA) is looking to acquire a major equity stake in MRPL’s existing refinery as well as the 15 mmtpa refinery proposed to be set up in the Mangalore SEZ. Additionally, the company is seeking to pick up stakes in the discovered and producing assets of ONGC in India and abroad.

In MRPL, ONGC holds a majority stake of 71.62%, while HPCL holds 16.97% and is seeking to enhance its stake in MRPL to over 26%. Besides monetary considerations and offering them equity in their rich oil fields in Venezuela, PDVSA may enter into crude supply and product off-take arrangements with ONGC. PDVSA's business development unit Corporacion Venezulana de Petroleo (Venezuelan Petroleum Corporation) will be negotiating the stake deal with the Indian government and ONGC.

PDVSA is also in negotiations with OVL, the overseas arm of ONGC, to offer a 30% stake in the San Cristobal block. The company is in the process of procuring certification for the reserves in the block, which may take another 18 months. Preliminary estimates of the in-place reserves are 1.3 trn barrels of oil. The oil found is heavy and only 20%, or 235 bn barrels, is recoverable.

Read The Economic Times article.

HPCL to sell 50% stake in Vizag refinery to French oil firm Total

Hindustan Petroleum Corporation Limited (HPCL) is selling 50% stake in its Vizag refinery to French oil major Total SA. Total may pick up the stake in collaboration with Kuwait Petroleum for a consideration of Rs. 6000 crores.

HPCL is setting up a 9 mn tonne export-oriented refinery adjacent to the existing refinery at Vizag at an estimated investment of Rs. 12,000 crores. The refinery would be completed in 2011. HPCL is also planning a 1 mmtpa petrochemical chemicals plant at the refinery site.

The company may also look to raise funds through an initial public offering of the Vizag refinery. In a related development, the Lakshmi Mittal Group has reportedly shown interest for a 49% stake in HPCL’s 9 mmtpa Bhatinda refinery in Punjab.

Read the article in Business Standard.

Tech Mahindra to buy iPolicy Networks India

Tech Mahindra has entered into an agreement for acquiring upto 100% equity in iPolicy Networks India, a wholly-owned subsidiary of US-based iPolicy. Tech Mahindra will also buy out iPolicy's assets including customer contracts, movable assets and vendor contracts.

Qatar’s RasGas to acquire 10% in Petronet LNG; stake valued at Rs. 460 crores

RasGas from Qatar may buy around 10%s equity stake in Petronet LNG (PLL) for a consideration of around Rs. 460 crores. PSU oil majors ONGC, BPCL, GAIL and IOC each having a 12.5 % stake in the company will divest 2.5% each to RasGas. RasGas is doing the due diligence.

RasGas is the first supplier of LNG to India and currently supplies 7.5 mn tonnes a year to Petronet’s LNG terminal at Dahej in Gujarat. RasGas and Petronet are in a 25-year sale and purchase agreement for LNG supplies. After diluting 10% stake to RasGas, BPCL, IOC, GAIL, ONGC and Gas de France will have stakes of 10% each in PLL. ADB will retain its 5.2% stake, while the remaining 34.8% lies with the Indian public.

The company requires Rs. 1700 crores for the expansion of Dahej LNG terminal from 5 mmtpa to 12 mmtpa. The company has tied up for a debt of $300 mn ($100 mn through FCCBs) and the balance would be funded by internal accruals. The company also envisages building the Kochi terminal at a cost of Rs. 2500 crores by 2010. The company has also allocated Rs. 300 crores for vessels, Rs. 460 crores for new jetty and Rs. 150 crores for solid cargo port.

Read the article in The Economic Times.

Thursday, January 18, 2007

VVF buys out Canada’s Teo Corp

Personal care products and oleo-chemicals maker VVF today announced the acquisition of Canada-based antiperspirant and deodorant maker, Teo Corp. This is the company’s second acquisition in North America after picking up Colgate’s manufacturing facility in Kansas in November Teo Corp had declared bankruptcy in late 2006 and the company will now operate as a wholly owned subsidiary of VVF.

The Colgate plant would be used to produce bar soaps and liquid home and personal care products. Through this acquisition, VVF will now have the capability to produce a range of underarm, deodorant and antiperspirant sticks as well as pain relief sticks. VVF would use the plant to expand its product line offering in North America and to further build its position in the growing private label market for personal care products.

VVF is largely into contract manufacturing for brands like Nivea in addition to having its own soap brands such as Doy, Doycare Aloe Vera, Shiff and Jo. Exports constitute over 50% of the Rs. 675 crores company’s turnover. The company aims to cross the Rs. 1000 crore-mark by 2008. In addition to the yet to be started North America operations, VVF also has operations in Dubai through which it taps the European and African markets.

Read the Business Standard article for more details.

Subex Azure to buy Syndesis for Rs. 730 crores

Subex Azure has entered into a conditional contract to acquire Canadian firm Syndesis. Subex Azure is a leading vendor of revenue maximization solutions for telecom operators. Syndesis is a global provider of telecom OSS (Operations Support Software) solutions. The acquisitions is in the form of an all cash deal and values Syndesis at $164.5 mn (around Rs. 730 crores) based on Syndesis’ trailing twelve months (TTM) revenues of $45 mn. Subex had earlier acquired UK-headquartered Azure Solutions Limited for $140 mn in June 2006.

If completed, this acquisition will be a milestone in Subex Azure's drive to become the leading global vendor of telecom OSS solutions. Following the close of the transaction, expected on or before March 31, 2007, Syndesis will become a part of Subex Azure. The expanded Subex Azure will reorganize itself into three distinct Strategic Business Units (SBUs) - Revenue Maximization Solutions SBU, Fulfillment & Assurance Solutions SBU and BT Business SBU. The current Subex Azure business, excluding business from British Telecom, will form the first SBU, the current Syndesis business will form the second SBU and the current Subex Azure business from British Telecom will form the third SBU. These SBUs will operate as independent revenue centers, each focused on delivering on its strategic plan and each leveraging its independent resources of account managers, domain experts and support specialists for superior product delivery and customer satisfaction.

Read the Business Standard and The Economic Times articles.

Rubamin acquires J&K Pigments

India’s largest zinc oxide maker, Rubamin, has acquired the Rs. 100 crore-J&K Pigments, another zinc oxide manufacturer located in the Kathua district of Jammu & Kashmir, for an undisclosed sum. The acquisition also provides the Rs. 360 crore-Rubamin with a base in J&K, where it enjoys tax incentives.

The acquisition would consolidate the company’s position as the largest zinc oxide producer in the country. Rubamin aspires to become one of the major producers of zinc oxide in the world by 2010. The Vadodara-based company has facilities in Halol, Daman and J&K. It also has a wholly owned subsidiary in Congo, which is engaged in mining, exploration and trading.

Rubamin is a top-notch export house, with exports around the world, and boasts of high-profile customers like Phelps-Dodge, Codelco and Bridgestone. Rubamin has been consistently rated one of the best vendors for these companies. Within the country, the company is a supplier to leading companies such as MRF, Apollo Tyre and Lubrizol. Rubamin has a nationally recognized R&D centre and apart from zinc oxide, it also manufactures cobalt salt. There are only a few companies in cobalt salt manufacturing.

Read the Business Standard article.

Pantaloon office stationery arm Future Office and US-based Staples sign stationery JV

Pantaloon Retail India has announced a joint venture between US-based Staples, Inc. and its new office products business unit, Future Office. The JV firm will serve businesses of all sizes through delivery as well as cash-and-carry locations, offering a wide range of office products from core office supplies to printers to computers.

The agreement establishes a platform for Staples to enter the $10 bn office products market in India and allows Pantaloon Retail to benefit from the industry expertise and sourcing network of the world’s largest office products company.

Read the Business Standard article for the comments of Ron Sargent, chairman & CEO, Staples and Kishore Biyani, MD & CEO, Pantaloon Retail India.

Oracle, PE firms eye stake in 3i Infotech

Indian software products and services firm 3i Infotech is reportedly under the radar of Oracle and some other private equity funds. Currently, the ICICI Group holds a little over 48% in the firm. 3i Infotech is mainly dominant in the in the financial services and enterprise resource planning (ERP) space, apart from services.

The ICICI Group is reportedly keen on reducing its stake in 3i Infotech and that it has been in talks with private equity players. US software giant Oracle is also doing the rounds of being interested in a stake in 3i Infotech.

The ICICI group has been scouting for suitable buyers since the last few months. Its stake is held through two group companies, ICICI Bank and ICICI Strategic Investments Fund. Reserve Bank of India has asked all banks to progressively reduce their stakes in non-finance group companies. The group's stake has already come down marginally from 54% to 48% from March 2006 to September 2006.

Last year, 3i also acquired a Hyderabad-based firm, which gave it a presence in the growing anti-money laundering solutions space. Its flagship insurance product, PREMIA, also integrates with Oracle e-business suite and as recently as December 2006, it set up a centre of excellence for insurance in Chennai in partnership with Oracle. In this context, the acquisition makes strategic sense to Oracle.

3i has been delivering impressive numbers in the past few quarters. For the September quarter, it reported a profit of Rs. 23.2 crores on revenues of Rs. 149 crores. In fiscal 2006, it recorded a profit after tax of Rs. 58 crores and revenues of Rs. 424 crores. 3i was originally set up as a 100% subsidiary of the ICICI Group as ICICI Infotech. Later, the company changed its name to 3i Infotech and also went public.

Read The Economic Times article.