Thursday, January 4, 2007

Enam Securities to consult Sutlej Textiles on restructuring plans

Enam Securities has been appointed as a consultant to the KK Birla Group-controlled Sutlej Textiles and Industries Limited (STIL) for carrying out corporate restructuring of the outfit. This may involve bringing in a strategic investor.

STIL was formed last year by de-merging the entire textile business of Sutlej Industries Limited (SIL). SIL would remain as the investment company of the group. The KK Birla group holds close to 62% in STIL. The group plans to infuse up to Rs. 80 crores through private placement. These funds will be used for long term working capital requirement as well as to enhance the company’s equity base.

Read the Business Standard article.

Tega Industries to buy companies South Africa, Brazil

Kolkata-based engineering outfit Tega Industries is looking for acquisitions in South Africa and Brazil. It is in the final stages of acquiring Boruc, a South Af4rican company with a turnover of Rs. 60-70 crores. The company management has refused to divulge the financial details of the transaction.

The company also has initiated discussions with 2-3 outfits in Brazil for a joint venture or outright acquisition and expects the Brazilian venture to be finalized over the next couple of months. It currently has overseas marketing offices in eight countries and it is one of the leaders in mining equipments in the eastern region.

Read more on Tega Industries in Business Standard.

Nicholas' Wellspring buys Jankharia Imaging

Nicholas Piramal India-promoted pathology laboratories and diagnostic venture Wellspring has acquired Mumbai-based radiology and imaging centre Jankharia Imaging. The new entity would be renamed Wellspring-Jankharia Imaging. Following the acquisition Wellspring would be the first corporate diagnostic provider to enter into high-end health imaging services.

Wellspring is a chain of pathology labs and diagnostics centers spread across the country. It is present in more than 35 locations in India with over 50 processing labs.

Wellspring has ambitious investment plans in the next two years during which it would offer tele-radiology solutions requiring expert radiology opinions across India and abroad. It intends to have high end imaging centers across the country and would be looking for many more partners in key cities across India. It would also tap areas like public private partnership opportunities being offered by government-run medical college hospitals across the country.

Read the Business Standard and The Economic Times articles.

Foreign investors pick 20% stake in Edelweiss Capital

Mumbai-based investment bank Edelweiss Capital has divested 20% stake to a number of financial investors including the Government of Singapore Investment Corporation (GIC) and the New York-based hedge fund Galleon Partners for around $90 mn.

Edelweiss will announce the deal soon after the Foreign Investment Promotion Board (FIPB) clears the investments.

With this transaction, Edelweiss is valued at around $400-450 million. The investment bank is also considering an initial public offer (IPO) by 2008 to give an exit option to its various investor groups. Prior to deal, employees and promoters of Edelweiss were holding around 74% equity stake, with Greater Pacific Capital (GPC), a London-based strategic investment firm and Americorp Capital jointly holding the remaining 24% stake.

Edelweiss was established in 1996 and now boasts of a team of around 600 people, with services ranging from brokerage to investment banking, asset management and insurance advisory. Edelweiss has been growing at 100% growth rate over the last 3 years. Revenues grew to Rs. 147 crores in 2005-06, from Rs. 73 crores in the previous year, while PAT grew to Rs. 42 crores from Rs. 24 crores.

Read The Economic Times article.

i-flex Solutions buys out Capco's Singapore subsidiary

Bangalore-based IT solutions provider i-flex Solutions is buying out the Singapore arm of Capco, The Capital Markets Company through its own Singapore-based subsidiary. With this acquisition, i-flex will strengthen its ability to provide high-end consulting to banks in the Asia Pacific region.

Read more on this news at The Economic Times.

Fujitsu in talks to buy out Intelenet Global Services, eyes acquisitions in the IT space

Fujitsu, Japan's largest IT services company is in advanced stages of talks to buy out Intelenet Global Services, a Mumbai-based BPO. Intelenet is a joint venture between Barclays Bank of UK and HDFC. HDFC and Barclays each hold 50% in the venture. Fujitsu is reported to be in talks to buy out Barclays' stake and subsequently may also acquire HDFC's stake.

Currently, Fujitsu has a presence in India through two companies, Rapidigm, a 100% subsidiary, and Zensar Technologies, a joint venture company with the RPG group. Fujitsu acquired Rapidigm, a US-based BPO firm with operations in India, in February 2006.

Fujitsu does not have management control in Zensar and is thus also looking at acquisitions in IT services. Fujitsu is under pressure to build its presence in the fast growing Indian market.

For more, read The Economic Times article.

EXL Service Holdings in acquisition mode

NASDAQ-listed Indian BPO vendor EXL Service Holdings is looking at acquisitions of companies in the $5-30 mn range. Currently, the company is scouting the Eastern European, Caribbean and South American countries for language capabilities, and South Africa for domain expertise in the banking, financial services and insurance (BFSI) space.

Last year, the company had announced the acquisition of Inductis, a strategy and analytics company serving the financial services and insurance industries. As a result of the acquisition, Inductis, with revenues of about $20 mn in 2005 became a wholly-owned and independently branded subsidiary of EXL, focusing on consulting and research and analytics. At the time of acquisition, Inductis had 250 employees based in offices in Gurgaon, New York, New Jersey, and Singapore.

Read the article in The Economic Times.

Private equity firms may invest in consumer durables retailer Viveks

Chennai-based consumer durable retailer Vivek's may invite private equity companies to offer a part of its equity to fund expansion plans. Company executives say that private equity players will be roped in before the chain goes in for a public listing by 2007-08. Vivek's has 54 stores across Tamil Nadu and Karnataka and intends to tap the growing durable retail markets in other southern states like Andhra Pradesh and Kerala.

The company plans to open 100 stores in South India in the next three years. Vivek's has three retail brands — Vivek's, Jainsons and Premier — in its portfolio. In March 2006, the company clocked turnover of Rs. 330 crores and is expected to touch Rs. 400 crores by March 2007.

Read the article from Business Standard.

Rajkot-based broking house gets PE funding from UK-based India Capital Growth Fund

Rajkot-based equity broking house Marwadi Shares & Finance Limited (MSFL) has received Rs. 26 crores from UK-based India Capital Growth Fund Limited (ICGFL) in exchange of a 15.66% stake.

MSFL plans to raise about Rs. 60 crores through private placement with foreign investors in two phases, with investment from ICGFL being in the first phase. For the rest of the amount, the company is negotiating private equity placement with a couple of foreign players. The deal is likely to materialize by March 2007.

ICGF is a Guernsey (UK)-registered investment company listed on AIM, the London Stock Exchange’s international market for smaller growing companies, and is managed by India Investment Partners Limited, a London-based investment manager. MSFL is a decade-old financial services group offering stock-broking and commodity-broking through NSE, BSE, NCDEX and MCX. The company has 24 branches, with a total manpower of over 250 employees and a customer base of 75,000-plus.

Read the article in the Business Standard.

Reliance India Power Fund buys 15% in KRYFS Power Component

Reliance India Power Fund has acquired a 15% stake in KRYFS Power Component for an undisclosed sum. Reliance India Power Fund is a 50:50 JV between the Reliance-ADAG financial services subsidiary Reliance Capital and Singapore-based private equity firm Temasek Holdings. The corpus of the fund is $200 mn and has been set up to invest in Indian power ancillary companies. Su-Kam Power Systems, EMI Transmission, and Ravin Cables are some of its investee companies.

The fund invested Rs. 45 crores in Delhi-based Su-Kam Power Systems for a 20% stake and Rs. 50 crores in Mumbai-based EMI Transmission, an unlisted power equipment company, for a 23% stake.

KRYFS Power Component is a Rs. 300-crore manufacturer of transformer cores and patented sling-set twin path slings. It will utilize the funds for capacity expansion and diversifying into newer businesses through organic and inorganic means. The company manufactures high-tenacity fiber slings in collaboration with Slingmax, Inc. of USA and currently has a capacity to produce nearly 12,000 mt of transformer cores, wound cores and built up cores.

Read The Economic Times article for more details.

Pantaloon may divest stake in Planet Retail JV

This follows the other news about Pantaloon Retail planning to divest its stake in its subsidiaries. Future Group promoter Kishore Biyani is planning to sell a part of his 49% stake in Planet Retail Holdings (PRHL), a JV between Pantaloon Retail and Indonesian retailer Planet Sports promoted by V P Sharma.

Planet Retail has declined to comment on the issue, while Mr. Biyani has denied any such move on his part.

PRHL sells brands such as Marks & Spencer, Guess, Body Shop, Converse and Speedo in India. The group is also likely to introduce the world’s largest coffee chain Starbucks to India in August.

Planet Retail has the licensing rights for a number of other global brands including Wilson, Puma, Speedo, Converse and Zara. In addition, the company has announced foray into department stores through Debenhams, a UK-based chain. It has also entered the health and beauty segment with the launch of The Body Shop, another UK company which was recently taken over by L’Oreal. Planet Retail has over 55 stores across various concepts and formats with a total retail space of over 1 lakh square feet.

Read The Economic Times article for more details.
Related Post: Pantaloon Retail to divest stakes in subsidiary companies

The Adani Group in the process of selling retail business to Reliance

The Adani Group has initiated the process of selling off its retail business to Reliance Industries. The deal is estimated to be around Rs. 200 crores. Reliance Industries has started interviewing the Adani retail staff and will select people it wants to retain in the business.

Adani Retail operates a total of 54 outlets across Gujarat and sells groceries and apparel. With the acquisition Reliance will get access to over 54 supermarkets and hypermarkets across nine cities in Gujarat. The acquisition will provide a ready infrastructure to Reliance, as 60% of Adani’s retail outlets are company-owned. The acquisition formalities are expected to be fully completed in a couple of months.

For more details, read The Economic Times article.

Birla group’s retail arm buys Trinethra supermarket chain

Aditya Birla Retail, the unlisted retail arm of the diversified Birla group, has acquired Hyderabad- Trinethra Super Retail and its online shopping outfit Fabmall. The India Venture Fund-owned Trinethra Super Retail was founded in 1986 and is Southern India’s fastest-growing grocery retail chain. It has over 2500 employees and is headed by former Reckitt & Benckiser MD Pranab Barua. The Trinethra group has annual revenues of about Rs. 250 crores and has over 172 retail outlets spread across the four states of Andhra Pradesh, Kerala, Karnataka and Tamil Nadu. While the Trinethra brand is used in Tamil Nadu and Andhra Pradesh, in Kerala and Karnataka it is known as Fabmall.

The Birla group has been concentrating only on supermarkets and hyper-markets, the two formats in which the Hyderabad-based retail chain has a strong presence. Although the financial details of the Birlas’ retail business isn’t clear, it has been reliably learnt that the group would pump in Rs. 5000-Rs 6000 crores at least in the initial phase, which could be subsequently ramped up once the business grows.

The financing for Birla’s retail plans may come from its unlisted units. Birla TMT Holdings, an unlisted company, is likely to part finance the investment, while some debt could also be raised. Recently, the Birla group, via Birla TMT, had raised close to $980 mn by selling about 33% of its equity stake in telecom unit Idea Cellular, to about six private equity firms.

Retail is being touted as one of the fastest-growing sectors in India with potential market size estimated at about $300 bn. A recent PriceWaterhouseCoopers study estimates the size of organized food retailing in India at about $666 million and is expected to grow at about 30% every year. The growth will be largely driven by new large format stores like hypermarkets and supermarkets. The Trinethra chain of stores is primarily focused on food and groceries.

Read The Economic Times article.