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.
Thursday, January 18, 2007
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.
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.
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.
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.
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.
Oberoi Constructions receives Rs. 675 crores from Morgan Stanley Real Estate Fund
Morgan Stanley Real Estate Fund has invested Rs. 675 crores (approximately $152 mn) in Mumbai-based Oberoi Constructions for an undisclosed stake. The private equity deal is said to be the largest in the Indian real estate sector. Fourteen other funds, including Blackstone, Carlyle, and GE, were in the race to acquire the stake in Oberoi Constructions. Morgan Stanley Real Estate Fund recently invested $67.4 mn in Mantri Developers. The fund looks at a return of more than 30% annually.
The company has projects lined up for Pune, Hyderabad and Bangalore for which it will acquire land. It has interests in both commercial and residential projects. It plans to diversify into shopping malls, hotels, hospitals and education centres. It has ongoing residential and commercial projects in Mumbai's suburbs - the Oberoi Mall in Goregaon, Oberoi Chambers and Garden Estate in Andheri, among others.
The real estate company has been valued at $1 bn by Kotak Mahindra Capital, the advisors to the deal. Anand Madduri, Executive Director, Morgan Stanley Dean Witter Asia, will be joining the Oberoi Constructions' board.
The real estate sector is growing at a whopping 35-40% and has seen large private equity deals in the last few months with nearly $350 mn in investments flowing into the sector. Siachen Capital has invested $100 mn in Bangalore-based Nitesh Estates, HDFC Real Estate has invested $35 mn in the Ansals IT City and Parks and another $31 mn in Pune-based developer Vascon Engineers. More than 20 funds are interested in the sector.
Read The Economic Times article for more details.
The company has projects lined up for Pune, Hyderabad and Bangalore for which it will acquire land. It has interests in both commercial and residential projects. It plans to diversify into shopping malls, hotels, hospitals and education centres. It has ongoing residential and commercial projects in Mumbai's suburbs - the Oberoi Mall in Goregaon, Oberoi Chambers and Garden Estate in Andheri, among others.
The real estate company has been valued at $1 bn by Kotak Mahindra Capital, the advisors to the deal. Anand Madduri, Executive Director, Morgan Stanley Dean Witter Asia, will be joining the Oberoi Constructions' board.
The real estate sector is growing at a whopping 35-40% and has seen large private equity deals in the last few months with nearly $350 mn in investments flowing into the sector. Siachen Capital has invested $100 mn in Bangalore-based Nitesh Estates, HDFC Real Estate has invested $35 mn in the Ansals IT City and Parks and another $31 mn in Pune-based developer Vascon Engineers. More than 20 funds are interested in the sector.
Read The Economic Times article for more details.
Norwegian company to buy MTR Foods for Rs. 350 crores
Norwegian food company Orkla Foods may turn out to be the acquirer of South-based MTR Foods. The deal size is said to be around Rs. 325-350 crores. Earlier, US spice company McCormick was widely tipped to take over MTR. However, the deal fell through at the last minute due to differences over structuring of the deal, particularly on certain intellectual property issues relating to the brand name.
Orkla is keen on acquiring MTR as it will provide a launch pad for Indian operations. The Norway-based company has presence in bakery, seafood, pizzas, pies, taste enhancers and snacks. In the past, Orkla has grown its international presence through acquisitions in Romania, Sweden, Denmark and Iceland. Orkla Foods is part of Orkla ASA, one of Norway’s largest listed companies with its core businesses being branded consumer foods, specialty materials and financial investments.
MTR’s brand pull is such that several large Indian corporates, including Tata Coffee, ITC, Godrej and several PE funds like Blackstone, Indivision and Actis had shown interest in the company. NM Rothschild was the investment banker for MTR, and had estimated a value of Rs. 300 crores on the company when it called for bids earlier this year. The Maiya family controls 59% stake in the company directly and indirectly, with JP Morgan holding 26% stake. Another fund, Aquarius, holds 14-15%. MTR’s portfolio comprises ready-to-eat, ready-to-cook food ingredients and spices.
Read The Economic Times article for more details.
Orkla is keen on acquiring MTR as it will provide a launch pad for Indian operations. The Norway-based company has presence in bakery, seafood, pizzas, pies, taste enhancers and snacks. In the past, Orkla has grown its international presence through acquisitions in Romania, Sweden, Denmark and Iceland. Orkla Foods is part of Orkla ASA, one of Norway’s largest listed companies with its core businesses being branded consumer foods, specialty materials and financial investments.
MTR’s brand pull is such that several large Indian corporates, including Tata Coffee, ITC, Godrej and several PE funds like Blackstone, Indivision and Actis had shown interest in the company. NM Rothschild was the investment banker for MTR, and had estimated a value of Rs. 300 crores on the company when it called for bids earlier this year. The Maiya family controls 59% stake in the company directly and indirectly, with JP Morgan holding 26% stake. Another fund, Aquarius, holds 14-15%. MTR’s portfolio comprises ready-to-eat, ready-to-cook food ingredients and spices.
Read The Economic Times article for more details.
Mayfield Fund to invest in Tejas Networks as well as venture capital firm Seedfund
Silicon Valley-based venture capital firm Mayfield Fund has invested an undisclosed amount in Tejas Networks, a provider of next-generation optical networking products for global markets and in Seedfund, a seed stage technology venture capital firm.
Although Mayfield has in the past invested in companies whose development centers are in India, as well as in the off-shoring activities of portfolio companies, this announcement marks the venture fund's first direct foray into an Indian company. Mayfield Fund is one of the names which has been making the rounds in investment banking circles as one of the potential investors in boutique i-bank Avendus Advisors (See Related Post).
Read the Business Standard article.
Although Mayfield has in the past invested in companies whose development centers are in India, as well as in the off-shoring activities of portfolio companies, this announcement marks the venture fund's first direct foray into an Indian company. Mayfield Fund is one of the names which has been making the rounds in investment banking circles as one of the potential investors in boutique i-bank Avendus Advisors (See Related Post).
Read the Business Standard article.
L&T forms JV with Saudi company
Engineering and construction major Larsen & Toubro (L&T) Limited has entered into a joint venture (JV) with AA Turki Contracting & Trading Corporation (ATCO), a leading conglomerate in Saudi Arabia, for construction in the hydrocarbon and power sectors. The new venture would be known as Larsen & Toubro ATCO (Saudia) LLC, and would be registered as a local company in Saudi Arabia. Financial details were not disclosed.
Read more in The Economic Times.
Read more in The Economic Times.
Hyderabad-based API maker Krebs Biochemicals divests 14.9% stake to Ranbaxy
Ranbaxy Laboratories is buying a 14.9% stake in Krebs Biochemicals & Industries in a deal worth Rs. 9 crores. The acquisition falls just short of the trigger point of 15%, which calls for a mandatory open offer for a listed company in India. The promoter of Dr. Reddy’s Laboratories, Anji Reddy, also holds a 5.1% stake in Krebs in his personal capacity.
Krebs is a small Hyderabad-based publicly listed company promoted by its MD RT Ravi, engaged in the business of manufacturing active pharmaceutical ingredients (API). The company has a market capitalization of about Rs. 57 crores. It posted sales of about Rs. 40 crores for the first nine months of FY 2007. Last year Ranbaxy had expanded its in-house API manufacturing capacities by acquiring the Gwalior-based Cardinal Drugs. Ranbaxy has two manufacturing units for APIs in India, at Mohali and Toansa in Punjab.
Ranbaxy would pick up the equity through a preferential allotment at Rs. 85 per share. Krebs’ board had approved the allotment in its meeting held on January 15, 2007. The Krebs scrip moved up 4.98% to close at Rs 99.05 on Wednesday at the BSE. The stock has shot up 26.42% over the past week.
An immediate takeover of Krebs by Ranbaxy appears unlikely. Krebs’ board has also approved the issue of 20 lakh warrants to the promoter group and selected investors to be converted into equity at Rs 74.3 per share within 18 months from the date of allotment. If all the warrants are issued to the promoters, their stake would go up from 45% as of September 30, 2006. And upon conversion of these warrants Ranbaxy’s stake in Krebs would come down to about 11.6%.
Read the article in The Economic Times.
Krebs is a small Hyderabad-based publicly listed company promoted by its MD RT Ravi, engaged in the business of manufacturing active pharmaceutical ingredients (API). The company has a market capitalization of about Rs. 57 crores. It posted sales of about Rs. 40 crores for the first nine months of FY 2007. Last year Ranbaxy had expanded its in-house API manufacturing capacities by acquiring the Gwalior-based Cardinal Drugs. Ranbaxy has two manufacturing units for APIs in India, at Mohali and Toansa in Punjab.
Ranbaxy would pick up the equity through a preferential allotment at Rs. 85 per share. Krebs’ board had approved the allotment in its meeting held on January 15, 2007. The Krebs scrip moved up 4.98% to close at Rs 99.05 on Wednesday at the BSE. The stock has shot up 26.42% over the past week.
An immediate takeover of Krebs by Ranbaxy appears unlikely. Krebs’ board has also approved the issue of 20 lakh warrants to the promoter group and selected investors to be converted into equity at Rs 74.3 per share within 18 months from the date of allotment. If all the warrants are issued to the promoters, their stake would go up from 45% as of September 30, 2006. And upon conversion of these warrants Ranbaxy’s stake in Krebs would come down to about 11.6%.
Read the article in The Economic Times.
AV Birla Group to split Madura Garments two-way
Madura Garments, India’s largest branded apparel business, will be split into two separate companies by its owner, the AV Birla Group (AVB). AVB would carve out separate entities for lifestyle and mass brands out of the unlisted company.
The group will unveil MG Lifestyle Brands & Retail Business, a new fashion brands company operating with key brands such as Louis Philippe, Allen Solly and Van Heusen, besides lifestyle retail formats such as Planet Fashion and Trouser Town. SF Jeans, Madura’s denim brand, and the international licensed brand Esprit will also be part of the new entity. MG Popular Brands & Retail Business would operate in the mid-priced-to-mass category with brands like Peter England. Both the new entities will be divisions of AV Birla Nuvo.
Madura Garments is expected to report revenues of round Rs. 600-650 crores in FY 2007, and is currently the leader in the domestic apparel space with annualized growth of 20% in recent years. AVB acquired Madura Garments from UK’s Coats for Rs. 236 crores in 1999. The fashion brands company, which will also include Allen Solly Womenswear and Van Heusen Womenswear, is likely to report a topline of Rs. 450-480 crores, while the standalone Peter England is likely to show up with a Rs. 180 crore-turnover in FY 2007.
Read The Economic Times article.
The group will unveil MG Lifestyle Brands & Retail Business, a new fashion brands company operating with key brands such as Louis Philippe, Allen Solly and Van Heusen, besides lifestyle retail formats such as Planet Fashion and Trouser Town. SF Jeans, Madura’s denim brand, and the international licensed brand Esprit will also be part of the new entity. MG Popular Brands & Retail Business would operate in the mid-priced-to-mass category with brands like Peter England. Both the new entities will be divisions of AV Birla Nuvo.
Madura Garments is expected to report revenues of round Rs. 600-650 crores in FY 2007, and is currently the leader in the domestic apparel space with annualized growth of 20% in recent years. AVB acquired Madura Garments from UK’s Coats for Rs. 236 crores in 1999. The fashion brands company, which will also include Allen Solly Womenswear and Van Heusen Womenswear, is likely to report a topline of Rs. 450-480 crores, while the standalone Peter England is likely to show up with a Rs. 180 crore-turnover in FY 2007.
Read The Economic Times article.
Takeover regulations for undercapitalized banks to be eased
The government is planning to amend the Banking Regulations Act so as to facilitate the route for foreign banks to acquire undercapitalized private banks. The government has on its agenda the tabling of the Banking Regulations (Amendment) Bill as well as the Pension Fund Development and Regulatory Authority Bill in the Budget session to push further financial sector reforms
The amendments to the Banking Regulations Act were expected to help foreign banks acquire undercapitalized private Indian banks. “Undercapitalized” refers to those category of banks that have not been able to raise their net worth to the minimum required Rs. 300 crores.
The Reserve Bank of India’s (RBI’s) roadmap on banking consolidation allows only “weak” banks to be acquired but the central bank has neither defined what a weak bank is nor ever identified a weak bank. The RBI’s roadmap proposes to open up the banking sector to foreign banks from 2009.
Consolidation among public sector banks is expected to gather momentum in 2007 as even some Indian banks have shown interest in buying undercapitalized banks, he added. The amendment to the Banking Regulations Act will align the voting rights of foreign and domestic shareholders with their shareholding. Apart from public sector banks, the government will also be selling some of its stakes in public sector undertakings. The proceeds of these sales will accrue to the National Investment Fund. This money will be used for social sector programmes and also for the revival of ailing public sector utilities.
Some of the banks having net worth under Rs. 300 crores as on March 31, 2006, and are thus potential takeover targets include the Catholic Syrian Bank (Rs. 216 crores), the City Union Bank (Rs. 286 crores), the Dhanalakshmi Bank (Rs. 134 crores), the Lakshmi Vilas (Rs. 291 crores), and the Ratnakar Bank (Rs. 54 crores).
Read more on this in the Business Standard article.
More Articles:
Now, old private banks hit the M&A trail
Small banks back in demand on hopes of foreign buyouts
The amendments to the Banking Regulations Act were expected to help foreign banks acquire undercapitalized private Indian banks. “Undercapitalized” refers to those category of banks that have not been able to raise their net worth to the minimum required Rs. 300 crores.
The Reserve Bank of India’s (RBI’s) roadmap on banking consolidation allows only “weak” banks to be acquired but the central bank has neither defined what a weak bank is nor ever identified a weak bank. The RBI’s roadmap proposes to open up the banking sector to foreign banks from 2009.
Consolidation among public sector banks is expected to gather momentum in 2007 as even some Indian banks have shown interest in buying undercapitalized banks, he added. The amendment to the Banking Regulations Act will align the voting rights of foreign and domestic shareholders with their shareholding. Apart from public sector banks, the government will also be selling some of its stakes in public sector undertakings. The proceeds of these sales will accrue to the National Investment Fund. This money will be used for social sector programmes and also for the revival of ailing public sector utilities.
Some of the banks having net worth under Rs. 300 crores as on March 31, 2006, and are thus potential takeover targets include the Catholic Syrian Bank (Rs. 216 crores), the City Union Bank (Rs. 286 crores), the Dhanalakshmi Bank (Rs. 134 crores), the Lakshmi Vilas (Rs. 291 crores), and the Ratnakar Bank (Rs. 54 crores).
Read more on this in the Business Standard article.
More Articles:
Now, old private banks hit the M&A trail
Small banks back in demand on hopes of foreign buyouts
UB to acquire Whyte & Mackay for £500 mn
The United Breweries Group is close to acquiring Glasgow-based distillers Whyte & Mackay for nearly £500 mn (Rs. 4350 crores) by January-end. This will be the largest outbound acquisition by an Indian company.
United Spirits, a part of the group flagship United Breweries, might be the investment vehicle for the acquisition of Whyte & Mackay.
Citigroup advised Whyte & Mackay, while United Spirits was advised by UBS.
The acquisition follows United Breweries’ attempt to acquire Taittinger, the world’s sixth largest champagne company, for £400 mn.
Read more in the Business Standard article.
United Spirits, a part of the group flagship United Breweries, might be the investment vehicle for the acquisition of Whyte & Mackay.
Citigroup advised Whyte & Mackay, while United Spirits was advised by UBS.
The acquisition follows United Breweries’ attempt to acquire Taittinger, the world’s sixth largest champagne company, for £400 mn.
Read more in the Business Standard article.
Star to buy 20% stake in radio company MBPL
Rupert Murdoch-controlled Star Group will pick up 20% equity in radio company Music Broadcast Private Limited (MBPL) from private equity firm India Value Fund Advisors (IVFA). MBPL runs its radio service under the brand 'Radio City', which is operational in major cities like Mumbai, Delhi, Bangalore, Lucknow, Hyderabad, Chennai and Jaipur. The company also won licenses in the second round of FM radio bidding and has plans to launch services in cities like Nagpur, Surat, Ahmedabad and Baroda.
The two companies had technically approved the deal and now Star would be seeking governmental approval to make the investments. Star will be approaching the Foreign Investment Promotion Board (FIPB) to seek permission for making the investments.
This will be Star's second coming in the Indian FM radio business, after its stint with MBPL earlier where it was responsible for content supply and ad-sales, though without putting in equity. Star did not have any stake in the company at that time as the Government had not opened the sector to FDI. However, with the government allowing 20% equity in private FM radio as well as laying down a favourable policy regime, in the form of a revenue share regime, Star has made a comeback in the segment through equity participation.
Read the article in The Financial Express and The Economic Times.
The two companies had technically approved the deal and now Star would be seeking governmental approval to make the investments. Star will be approaching the Foreign Investment Promotion Board (FIPB) to seek permission for making the investments.
This will be Star's second coming in the Indian FM radio business, after its stint with MBPL earlier where it was responsible for content supply and ad-sales, though without putting in equity. Star did not have any stake in the company at that time as the Government had not opened the sector to FDI. However, with the government allowing 20% equity in private FM radio as well as laying down a favourable policy regime, in the form of a revenue share regime, Star has made a comeback in the segment through equity participation.
Read the article in The Financial Express and The Economic Times.
NVP invests $20 mn in KPO Adventity
Norwest Venture Partners (NVP) has invested $20 mn in Adventity, a provider of finance-focused strategic KPO and BPO services. Noted venture capitalist and managing partner at NVP, Mr. Pramod Haque, will join the company's board of directors. Adventity will use this funding to expand its market presence and infrastructure, further build out its innovative service offerings and increase business development efforts.
The NVP-led investment represents the first institutional round of funding for Adventity. Adventity's KPO solutions encompass quantitative capabilities such as financial modeling, comparable valuation analysis and data mining, as well as qualitative services such as broad researching and industry profiling. With more than 2000 employees globally, Adventity's clients include several global and investment banks, airlines, and some of the largest hedge funds.
Read the article in The Economic Times.
The NVP-led investment represents the first institutional round of funding for Adventity. Adventity's KPO solutions encompass quantitative capabilities such as financial modeling, comparable valuation analysis and data mining, as well as qualitative services such as broad researching and industry profiling. With more than 2000 employees globally, Adventity's clients include several global and investment banks, airlines, and some of the largest hedge funds.
Read the article in The Economic Times.
ICSA Limited attracts $52 mn foreign investment from Citigroup and Goldman Sachs
ICSA Limited, an embedded technology provider, has attracted foreign investment of around $52 mn through two different deals. The company has made a private placement to Citigroup Venture Capital International Growth Partnership Mauritius Limited (CVC), for a sum of $30 mn, while investment banking firm Goldman Sachs has invested $22 mn in the company through the FCCB route.
Citigroup has acquired 14% stake in ICSA by investing $30 mn at a price of Rs. 950 per equity share. With the Citigroup's investment the level of FII holding in ICSA would go up from 25.37% at present to 30.4%. Citigroup will also nominate a member to the board of ICSA. Since the equity picked up by Citigroup is through a fresh issue the promoter stake in the company will continue to remain at 20.5% after conversion of warrants. The sum raised will be used to fund working capital needs and for investments in R&D.
ICSA has been developing technology solutions for power, water, oil and gas sectors to identify transmission and distribution losses and monitor consumption. ICSA is also looking at expanding its global operations and is looking at acquisitions in the utility sectors like water, gas and power where the utilities can be provided with the products of the company. Overseas markets contribute to 25% of the revenue, which the company expects to go up to 50% in the next few years.
Read The Financial Express article.
Related article: Citigroup plans $1 bn PE spend
Citigroup has acquired 14% stake in ICSA by investing $30 mn at a price of Rs. 950 per equity share. With the Citigroup's investment the level of FII holding in ICSA would go up from 25.37% at present to 30.4%. Citigroup will also nominate a member to the board of ICSA. Since the equity picked up by Citigroup is through a fresh issue the promoter stake in the company will continue to remain at 20.5% after conversion of warrants. The sum raised will be used to fund working capital needs and for investments in R&D.
ICSA has been developing technology solutions for power, water, oil and gas sectors to identify transmission and distribution losses and monitor consumption. ICSA is also looking at expanding its global operations and is looking at acquisitions in the utility sectors like water, gas and power where the utilities can be provided with the products of the company. Overseas markets contribute to 25% of the revenue, which the company expects to go up to 50% in the next few years.
Read The Financial Express article.
Related article: Citigroup plans $1 bn PE spend
Govt to raise ECB cap from $22 bn to $18 bn
The government will now allow companies to raise more foreign loans. It has asked the Reserve Bank of India to raise the external commercial borrowing (ECB) ceiling for 2006-07 to $22 bn, instead of $18 bn at present.
The move is expected to help companies like Reliance Communications, whose applications to raise $4 bn is awaiting approval. The Reliance Communications board had cleared a proposal to let the company raise long-term resources including ECBs. The board had also approved raising $1 bn through foreign currency convertible bonds. Reliance Communications had filed three applications for raising $4 bn, with two of them seeking permission for loans worth $500 mn each and the third for $3 bn. Apart from Reliance Communications, India Infrastructure Finance Company Limited, the special purpose vehicle set up by the Centre last year, is also expected to raise a sizable amount to finance core sectors developed by PSUs and through the public-private partnership model. Another infrastructure finance company, IDFC, has already started the process to raise ECBs to finance projects.
With interest rates in India on the rise, more domestic companies are expected to opt for ECBs to lower interest costs. Till December, Indian companies raised $14.3 bn through ECBs, and with proposals for another $6-7 bn awaiting clearance by a high-level committee, the government had little choice but to raise the cap on ECBs.
Read the article in The Times of India.
The move is expected to help companies like Reliance Communications, whose applications to raise $4 bn is awaiting approval. The Reliance Communications board had cleared a proposal to let the company raise long-term resources including ECBs. The board had also approved raising $1 bn through foreign currency convertible bonds. Reliance Communications had filed three applications for raising $4 bn, with two of them seeking permission for loans worth $500 mn each and the third for $3 bn. Apart from Reliance Communications, India Infrastructure Finance Company Limited, the special purpose vehicle set up by the Centre last year, is also expected to raise a sizable amount to finance core sectors developed by PSUs and through the public-private partnership model. Another infrastructure finance company, IDFC, has already started the process to raise ECBs to finance projects.
With interest rates in India on the rise, more domestic companies are expected to opt for ECBs to lower interest costs. Till December, Indian companies raised $14.3 bn through ECBs, and with proposals for another $6-7 bn awaiting clearance by a high-level committee, the government had little choice but to raise the cap on ECBs.
Read the article in The Times of India.
Goldman Sachs to pick up 5% stake in ITNL for Rs. 90 crores
Goldman Sachs is about to pick a 5% equity stake in IL&FS Transportation Networks (ITNL) for around Rs. 90 crores. ITNL is a vehicle promoted by IL&FS to spearhead its initiative in transportation infrastructure development.
This will be the second private placement in ITNL in the last three months. In October 2006, US-based private equity fund Trikona Capital bought 2.5% stake in the company for around Rs. 40 crores. Trikona also announced a $100-mn partnership with parent company IL&FS for investments in real estate and infrastructure.
ITNL is the promoter of the Noida toll road project and owns 22.6% equity in Noida Toll Bridge Company. Noida Toll Bridge is listed on the AIM market in London Stock Exchange. ITNL currently has a portfolio of 10-11 road sub-sector projects, which are in the development phase and a pipeline of such projects in the planning phase. The company, which has got road projects in Ahmedabad, Rajasthan, has recently won an annuity contract in Chhattisgarh. Incorporated in 2000, IL&FS has domiciled most of its transport sector investments and resources in ITNL for its surface transportation projects. The company also intends to participate in green field projects and provide advisory services. Already, the holdings of IL&FS and existing financial investors in the IL&FS sponsored projects are being transferred to ITNL.
Last week, Goldman Sachs bought a 5% stake in the National Stock Exchange. IL&FS was one of the deal makers in the transaction.
Read The Economic Times article.
This will be the second private placement in ITNL in the last three months. In October 2006, US-based private equity fund Trikona Capital bought 2.5% stake in the company for around Rs. 40 crores. Trikona also announced a $100-mn partnership with parent company IL&FS for investments in real estate and infrastructure.
ITNL is the promoter of the Noida toll road project and owns 22.6% equity in Noida Toll Bridge Company. Noida Toll Bridge is listed on the AIM market in London Stock Exchange. ITNL currently has a portfolio of 10-11 road sub-sector projects, which are in the development phase and a pipeline of such projects in the planning phase. The company, which has got road projects in Ahmedabad, Rajasthan, has recently won an annuity contract in Chhattisgarh. Incorporated in 2000, IL&FS has domiciled most of its transport sector investments and resources in ITNL for its surface transportation projects. The company also intends to participate in green field projects and provide advisory services. Already, the holdings of IL&FS and existing financial investors in the IL&FS sponsored projects are being transferred to ITNL.
Last week, Goldman Sachs bought a 5% stake in the National Stock Exchange. IL&FS was one of the deal makers in the transaction.
Read The Economic Times article.
DS Constructions to receive Rs. 900 crores in private equity funding
Delhi-based infrastructure player DS Constructions is about to receive a funding of Rs. 900 crores mix of debt and equity. Part of the debt will be convertible into equity at a later date. The money will be used to fund the equity commitments of the company for the various BOT projects. ICICI Securities is the strategic advisor for the deal.
Three institutions are in fray for the deal, which include a leading Indian bank, a leading European bank and the alternative investment vehicle of a Hong Kong-based hedge fund. At $185 mn, this is one of the largest transactions in the Indian private equity space. Of the total amount, the company is picking up $135 mn right now and has an option to take up the remainder later. About 25% of the total ($35 mn) will be convertible to equity if DS Constructions decides to go for a listing. The company is being tentatively valued at $800-1,000 mn, based on revenues and projects at hand.
DS Constructions is a mid-size construction company. It recorded a turnover of Rs. 450 crores last year. The company has an order backlog of Rs. 4000 crores, primarily in the road sector. DSC has a 67% stake in a Rs. 1900 crore-expressway in Haryana. It is also executing two road projects of total value of Rs 740 crore in Uttar Pradesh. All these projects have achieved financial closure. In addition to these, the company has also been awarded two hydel projects adding up to 1260 MW and worth Rs. 6500 crore. The company is considering an IPO in 6-12 months to fund our power projects. In addition to roads and hydel projects, DS Constructions has also done a railway project on BOT. The company has recently formed a 80:20 JV with Munich Airport International to bid for airport modernization projects.
Read the article in The Economic Times.
Three institutions are in fray for the deal, which include a leading Indian bank, a leading European bank and the alternative investment vehicle of a Hong Kong-based hedge fund. At $185 mn, this is one of the largest transactions in the Indian private equity space. Of the total amount, the company is picking up $135 mn right now and has an option to take up the remainder later. About 25% of the total ($35 mn) will be convertible to equity if DS Constructions decides to go for a listing. The company is being tentatively valued at $800-1,000 mn, based on revenues and projects at hand.
DS Constructions is a mid-size construction company. It recorded a turnover of Rs. 450 crores last year. The company has an order backlog of Rs. 4000 crores, primarily in the road sector. DSC has a 67% stake in a Rs. 1900 crore-expressway in Haryana. It is also executing two road projects of total value of Rs 740 crore in Uttar Pradesh. All these projects have achieved financial closure. In addition to these, the company has also been awarded two hydel projects adding up to 1260 MW and worth Rs. 6500 crore. The company is considering an IPO in 6-12 months to fund our power projects. In addition to roads and hydel projects, DS Constructions has also done a railway project on BOT. The company has recently formed a 80:20 JV with Munich Airport International to bid for airport modernization projects.
Read the article in The Economic Times.
Clearing Corporation of India to collaborate with The Euroclear Group
The Clearing Corporation of India Limited (CCIL) has signed a memorandum of understanding (MoU) regarding post-trading processing transactions. The entities have agreed to collaborate on post-trade processing and explore the feasibility of a communications gateway between CCIL and European Bank, the international central securities depository (CSD).
The Euroclear Group includes Euroclear Bank as well as Euroclear Belgium, Euroclear France, Euroclear Netherlands and CRESTCo, the CSDs of Belgium, France, the Netherlands, and the UK and Ireland, respectively, and settles securities transactions of over €350 trn every year.
Read the complete article in Business Standard.
The Euroclear Group includes Euroclear Bank as well as Euroclear Belgium, Euroclear France, Euroclear Netherlands and CRESTCo, the CSDs of Belgium, France, the Netherlands, and the UK and Ireland, respectively, and settles securities transactions of over €350 trn every year.
Read the complete article in Business Standard.
BankMuscat buys stake in domestic brokerage Mangal Keshav
Oman’s largest listed company, BankMuscat, is buying 43% stake in brokerage firm Mangal Keshav for an undisclosed sum. This acquisition makes BankMuscat the single-largest investor in the Indian financial services and securities sector from the Sultanate. The financial due diligence on behalf of BankMuscat was done by PriceWaterhouse Coopers India, while the legal due diligence was done by Amarchand Mangaldas. The transaction is expected to be completed in first quarter of 2007.
The Mangal Keshav Group was set up in 1939 and is one of the oldest brokerage houses in India. It is present in securities trading, commodities trading, insurance broking and IPO / mutual fund distribution space. The group is one of the top 20 brokers in the country by market share and is a member of all leading equity and commodity exchanges. It is also a member of the Dubai Gold & Commodities Exchange and has an office in Dubai.
As per Morgan Stanley research, the Indian equity markets is seeing one of the strongest rallies and trading volumes are expected to double to $3.2 trn in 2010 from about $1.6 trn currently. Morgan Stanley projects the Indian brokerage business to grow to $3.9 bn by 2015. Several leading international banks such as Citigroup, BNP, ABN-AMRO, etc. have announced their foray in the securities business in India.
Read the article in Business Standard.
The Mangal Keshav Group was set up in 1939 and is one of the oldest brokerage houses in India. It is present in securities trading, commodities trading, insurance broking and IPO / mutual fund distribution space. The group is one of the top 20 brokers in the country by market share and is a member of all leading equity and commodity exchanges. It is also a member of the Dubai Gold & Commodities Exchange and has an office in Dubai.
As per Morgan Stanley research, the Indian equity markets is seeing one of the strongest rallies and trading volumes are expected to double to $3.2 trn in 2010 from about $1.6 trn currently. Morgan Stanley projects the Indian brokerage business to grow to $3.9 bn by 2015. Several leading international banks such as Citigroup, BNP, ABN-AMRO, etc. have announced their foray in the securities business in India.
Read the article in Business Standard.
SEBI asks Actis to pay Phoenix Lamps’ minority shareholders same price as paid to promoters
The Securities and Exchange Board of India (SEBI) has asked private equity firm Actis to increase the open offer price for the minority shareholders of Phoenix Lamps by 25% to Rs. 190 a share.
Actis made the open offer it bought the entire 37%t stake in Phoenix Lamps from its promoters, the Gupta family. Priced at Rs. 152 a share, the mandatory 20% public offer was supposed to open on August 31 and close on September 19. SEBI has asked Actis to pay the same price it offered to the promoters. Actis had agreed to pay Rs. 190 a share to the promoters of the company, 25% higher than the price of the open offer, on account of non-compete fees. However, SEBI does not seem to be convinced of Actis’ argument.
This is the second instance of the SEBI coming down heavily on acquirers for paying the promoters more on account of non-compete fees. Last month, it had asked the German cement company Heidelberg Cement, which had acquired Mysore Cement, to raise the open offer price by 25% to Rs. 72.50 a share, the price it agreed to pay the promoters including non-compete fees. Heidelberg, however, challenged the SEBI order with the Securities Appellate Tribunal. Actis’ future course of action might be linked to the outcome of the SAT ruling on Heidelberg Cement.
Phoenix Lamps is the third management buyout by Actis in India after Nitrex and Punjab Tractors. Phoenix Lamps, owner of Halonix brand, posted a net profit of Rs. 24 crores last year on total sales of Rs. 230 crores.
Read the article in Business Standard.
Actis made the open offer it bought the entire 37%t stake in Phoenix Lamps from its promoters, the Gupta family. Priced at Rs. 152 a share, the mandatory 20% public offer was supposed to open on August 31 and close on September 19. SEBI has asked Actis to pay the same price it offered to the promoters. Actis had agreed to pay Rs. 190 a share to the promoters of the company, 25% higher than the price of the open offer, on account of non-compete fees. However, SEBI does not seem to be convinced of Actis’ argument.
This is the second instance of the SEBI coming down heavily on acquirers for paying the promoters more on account of non-compete fees. Last month, it had asked the German cement company Heidelberg Cement, which had acquired Mysore Cement, to raise the open offer price by 25% to Rs. 72.50 a share, the price it agreed to pay the promoters including non-compete fees. Heidelberg, however, challenged the SEBI order with the Securities Appellate Tribunal. Actis’ future course of action might be linked to the outcome of the SAT ruling on Heidelberg Cement.
Phoenix Lamps is the third management buyout by Actis in India after Nitrex and Punjab Tractors. Phoenix Lamps, owner of Halonix brand, posted a net profit of Rs. 24 crores last year on total sales of Rs. 230 crores.
Read the article in Business Standard.
Government may remove distinctions between FDI and FII
The government is contemplating the removal of the distinction between FDI and FII investments. The new policy will require changes in the Foreign Exchange Management Act (FEMA) regulations, and will look at foreign investments in a company as a whole, instead of treating foreign institutional investors (FIIs) as a separate entity.
The proposed policy change will impact several sectors, notably, the asset reconstruction companies, direct-to-home distribution of broadcast signals and real estate, where separate sub-ceilings or conditions apply at present for foreign direct investment (FDI), leaving FII investments outside their scope.
Senior finance ministry officials are set to hold a meeting later this week with the Reserve Bank of India (RBI) and the Department of Industrial Policy and Promotion (DIPP) to take a final view on this matter. The debate over removing distinctions between FII investments and FDI came up following the DIPP proposal over foreign investments in the real estate sector.
Read more in The Economic Times.
The proposed policy change will impact several sectors, notably, the asset reconstruction companies, direct-to-home distribution of broadcast signals and real estate, where separate sub-ceilings or conditions apply at present for foreign direct investment (FDI), leaving FII investments outside their scope.
Senior finance ministry officials are set to hold a meeting later this week with the Reserve Bank of India (RBI) and the Department of Industrial Policy and Promotion (DIPP) to take a final view on this matter. The debate over removing distinctions between FII investments and FDI came up following the DIPP proposal over foreign investments in the real estate sector.
Read more in The Economic Times.
Amruth IMFL brands attract attention from Radico Khaitan, Mason & Summers’ Vangal
Radico Khaitan and serial entrepreneur Ramesh Vangal seem interested in buying some liquor assets of the South-based Amruth Group. E&Y has been mandated by the Jagdale family-owned Amruth Distilleries to find suitors for its three IMFL brands and a bottling plant in Kerala which has a valuation of around Rs. 100-150 crores.
Amruth may offload Old Port Rum, Bejois Brandy and Prestige Whisky along with its plant as part of a re-structuring exercise. E&Y has opened talks with several potential buyers in recent weeks. The three brands together sold over a million cases with net revenues of Rs. 68 crores in FY 2006. Old Port Rum is the largest amongst the three brands that sell mainly in the southern markets. Old Port Rum and Bejois Brandy hold respectable share in their respective segments with Kerala being a key market.
Radico Khaitan, the second largest domestic liquor company, has made a slew of mid-sized acquisitions in recent years including the takeover of the IMFL portfolio of Brihans Maharashtra Sugar Syndicate. Ramesh Vangal, who steered Pepsi and Seagram into the country, returned to the liquor space two years back with a start-up entity Mason & Summers. He has been on the prowl for acquisitions to strengthen the operations.
Read the article in The Economic Times.
Amruth may offload Old Port Rum, Bejois Brandy and Prestige Whisky along with its plant as part of a re-structuring exercise. E&Y has opened talks with several potential buyers in recent weeks. The three brands together sold over a million cases with net revenues of Rs. 68 crores in FY 2006. Old Port Rum is the largest amongst the three brands that sell mainly in the southern markets. Old Port Rum and Bejois Brandy hold respectable share in their respective segments with Kerala being a key market.
Radico Khaitan, the second largest domestic liquor company, has made a slew of mid-sized acquisitions in recent years including the takeover of the IMFL portfolio of Brihans Maharashtra Sugar Syndicate. Ramesh Vangal, who steered Pepsi and Seagram into the country, returned to the liquor space two years back with a start-up entity Mason & Summers. He has been on the prowl for acquisitions to strengthen the operations.
Read the article in The Economic Times.
UTI to divest 36.58% stake in SICOM
The Unit Trust of India has invited bids from financial investors to sell its 36.58% stake in State Industrial Corporation of Maharashtra (SICOM), the investment arm of Maharashtra government. UTI holds 40% stake in SICOM - 36.58% through Specified Undertaking of Unit Trust of India (SU-UTI) and 3.5% is held by UTI Mutual Fund (UTI AMC).
The bids have been invited for the entire 36.58% stake held by SU-UTI. Foreign investors, including International Finance Corporation (IFC), the private sector lending arm of the World Bank Group and DEG, one of the largest European development finance institutions, have approached investment bankers to take stake in SICOM. Standard Chartered Private Equity (SCPE), Lehman Brothers, Singapore's Temasek Holdings and a couple of hedge funds may also be interested in picking up stake in SICOM (See Related Post).
Apart from UTI's 40%, the Maharashtra government holds 49% stake in the corporation. The remaining stake is held by other financial institutions and employees.
Read the article in The Economic Times.
The bids have been invited for the entire 36.58% stake held by SU-UTI. Foreign investors, including International Finance Corporation (IFC), the private sector lending arm of the World Bank Group and DEG, one of the largest European development finance institutions, have approached investment bankers to take stake in SICOM. Standard Chartered Private Equity (SCPE), Lehman Brothers, Singapore's Temasek Holdings and a couple of hedge funds may also be interested in picking up stake in SICOM (See Related Post).
Apart from UTI's 40%, the Maharashtra government holds 49% stake in the corporation. The remaining stake is held by other financial institutions and employees.
Read the article in The Economic Times.
UK-based Metdist Group and Trinity Capital buy stake in Fortis Healthcare
Fortis Healthcare has issued equity shares in a pre-IPO placement to 2 UK-based firms. The company has signed pr-IPO placement agreements for allotment of 1 mn equity shares each to Raj Kumar Bagri and Apurv Bagri of Metdist Group and 2 mn shares to Trinity Capital. The Metdist Group is a global metal trading firm based in London and has a presence in Malaysia, Thailand, China, the UAE and India. Trinity was formed in 2006 to invest in real estate and real estate-related entities in India.
Fortis has already signed two pre-IPO placements, aggregating up to $33.33 mn (about Rs. 150 crores), with Quantum, Blue Ridge Partnership and Blue Ridge Offshore Master.
The equity issued as per pre-IPO placements would be subject to lock-in after the completion of the IPO as per SEBI regulations.
Read the articles in The Economic Times and Business Standard.
Fortis has already signed two pre-IPO placements, aggregating up to $33.33 mn (about Rs. 150 crores), with Quantum, Blue Ridge Partnership and Blue Ridge Offshore Master.
The equity issued as per pre-IPO placements would be subject to lock-in after the completion of the IPO as per SEBI regulations.
Read the articles in The Economic Times and Business Standard.
Textile companies to raise about Rs. 1000 crores through IPO
Booming capital markets are encouraging companies in making the most of the situation. Five leading textile companies are set to raise about Rs. 1000 crores through IPOs in the near future to meet expansion plans, that include opening up retail stores and adding to manufacturing capacities.
The textile firms, which have filed their Draft Red Herring Prospectus (DRHP) with market regulator SEBI, include Oswal Woolen Mills Limited (OWM), House of Pearl Fashions Limited, Yogindera Worsted Limited and Asahi Songwon Colors Limited. The public offers of Pearl Fashions and Yogindera would open on January 16, while Oswal and Asahi have filed their documentation with the market regulator and are in the process of scheduling their IPOs. Total capital expenditure, which these five companies have finalized add up to Rs. 1217 crores, of which the major portion would come from the market.
Oswal Woolen, a flagship company of Nahar Group of Companies, is looking to raise about Rs. 179 crores with a public issue of 8.32 mn equity shares to fund growth plans, which include expanding retail presence through its 'Monte Carlo' brand outlets for woolen hosiery and cotton garments. OWM would spend Rs 40 crore on expansion of Monte Carlo brand outlets, taking the number of franchisee-run stores from 21 to 144 by 2009 and company owned stores to six. House of Pearls will tap the market with a total issue of 5.98 mn equity shares, through which it aims to raise up to Rs. 396 crores. It also aims to increase production capacity of the group from 20 mn pieces per annum to 40 mn pieces per annum. The company has earmarked an investment of about Rs. 360 crores for its expansion plans over the next three years, which would see it opening 10 pilot stores for its brand in the country by end of 2007. Asahi Songwon has lined up an expansion plan of Rs. 52 crores, of which it plans to raise Rs. 44 crores through the IPO. It intends to expand manufacturing facilities of CPC Blue Crude from present level of 3600 TPA to 10,800 TPA, set up a plant for manufacturing pigment beta blue and a new captive power plant at Padra, Vadodara. Yarn manufacturer Yogindera Worsted would raise Rs 14.4 crore through its IPO which would comprise an issue of 60 lakh fresh equity shares. The company is planning to utilize the funds to add 3,200 spindles to its current 6,040. The total expansion would need an investment of about Rs. 16 crores. The acrylic and blended company is also planning to diversify into ready to wear garments and would utilize part of the funds to set up a garment manufacturing unit in their Ludhiana facility.
Besides these four, Orient Craft has announced its plans of hitting the capital market soon to raise between Rs. 300-350 crores. In all, the textile public offers are likely to gross in over Rs. 1000 crores from the market.
Read the article in The Economic Times.
The textile firms, which have filed their Draft Red Herring Prospectus (DRHP) with market regulator SEBI, include Oswal Woolen Mills Limited (OWM), House of Pearl Fashions Limited, Yogindera Worsted Limited and Asahi Songwon Colors Limited. The public offers of Pearl Fashions and Yogindera would open on January 16, while Oswal and Asahi have filed their documentation with the market regulator and are in the process of scheduling their IPOs. Total capital expenditure, which these five companies have finalized add up to Rs. 1217 crores, of which the major portion would come from the market.
Oswal Woolen, a flagship company of Nahar Group of Companies, is looking to raise about Rs. 179 crores with a public issue of 8.32 mn equity shares to fund growth plans, which include expanding retail presence through its 'Monte Carlo' brand outlets for woolen hosiery and cotton garments. OWM would spend Rs 40 crore on expansion of Monte Carlo brand outlets, taking the number of franchisee-run stores from 21 to 144 by 2009 and company owned stores to six. House of Pearls will tap the market with a total issue of 5.98 mn equity shares, through which it aims to raise up to Rs. 396 crores. It also aims to increase production capacity of the group from 20 mn pieces per annum to 40 mn pieces per annum. The company has earmarked an investment of about Rs. 360 crores for its expansion plans over the next three years, which would see it opening 10 pilot stores for its brand in the country by end of 2007. Asahi Songwon has lined up an expansion plan of Rs. 52 crores, of which it plans to raise Rs. 44 crores through the IPO. It intends to expand manufacturing facilities of CPC Blue Crude from present level of 3600 TPA to 10,800 TPA, set up a plant for manufacturing pigment beta blue and a new captive power plant at Padra, Vadodara. Yarn manufacturer Yogindera Worsted would raise Rs 14.4 crore through its IPO which would comprise an issue of 60 lakh fresh equity shares. The company is planning to utilize the funds to add 3,200 spindles to its current 6,040. The total expansion would need an investment of about Rs. 16 crores. The acrylic and blended company is also planning to diversify into ready to wear garments and would utilize part of the funds to set up a garment manufacturing unit in their Ludhiana facility.
Besides these four, Orient Craft has announced its plans of hitting the capital market soon to raise between Rs. 300-350 crores. In all, the textile public offers are likely to gross in over Rs. 1000 crores from the market.
Read the article in The Economic Times.
Tata Steel buys domestic ferro-alloy maker Rawmet Ferrous
While being occupied with the Corus deal in the international arena, India’s leading private sector steelmaker Tata Steel is also making news in the domestic front. Tata Steel has acquired 100% stake in an unlisted Kolkata-based ferro-alloys firm, Rawmet Ferrous Industries, for an undisclosed sum.
The agreement was signed at Bhuvaneshwar by Tata Steel and representatives of IMR Metallurgical Resources AG, which holds 66.46% equity stake in Rawmet. Officials of Rawmet Commodities, which holds 12.48% equity stake, were also present. On conclusion of the above transaction, the board of Rawmet Ferrous Industries will be reconstituted to include representatives of Tata Steel.
Read the articles in The Economic Times and Business Standard.
The agreement was signed at Bhuvaneshwar by Tata Steel and representatives of IMR Metallurgical Resources AG, which holds 66.46% equity stake in Rawmet. Officials of Rawmet Commodities, which holds 12.48% equity stake, were also present. On conclusion of the above transaction, the board of Rawmet Ferrous Industries will be reconstituted to include representatives of Tata Steel.
Read the articles in The Economic Times and Business Standard.
Tata Motors to bid for Daewoo Romania
The Tata Group is planning to buy Daewoo Automobile Romania. Daewoo Romania was established in 1994 as a 51:49 JV between the Daewoo Group and the Romanian government.
The Romanian plant can produce 100,000 cars, 150,000 engines and 200,000 trans-axles. Bidding for Daewoo Automobile Romania, would heat up because of interest from global automobile giants such as Ford and Renault-Nissan and the Tata Group, which is in the middle of a bidding war with Brazil's CSN for the Anglo-Dutch steel-maker Corus. Daewoo Automobile Romania makes a range of Daewoo vehicles like the Matiz, Cielo, Nubira and Tacuma, and 1.5 litre petrol engines.
Daewoo was bought over by General Motors in 1999, but the US giant did not take over the Romanian venture. Recently, the Romanian government bought out Daewoo’s stake for $50 million and restructured the $10 million of the company’s debt.
Tata Motors last year acquired Nissan's South Africa plant for an undisclosed amount. The year before, it took over Daewoo Commercial Vehicles for $102 mn.
Read the Business Standard article.
The Romanian plant can produce 100,000 cars, 150,000 engines and 200,000 trans-axles. Bidding for Daewoo Automobile Romania, would heat up because of interest from global automobile giants such as Ford and Renault-Nissan and the Tata Group, which is in the middle of a bidding war with Brazil's CSN for the Anglo-Dutch steel-maker Corus. Daewoo Automobile Romania makes a range of Daewoo vehicles like the Matiz, Cielo, Nubira and Tacuma, and 1.5 litre petrol engines.
Daewoo was bought over by General Motors in 1999, but the US giant did not take over the Romanian venture. Recently, the Romanian government bought out Daewoo’s stake for $50 million and restructured the $10 million of the company’s debt.
Tata Motors last year acquired Nissan's South Africa plant for an undisclosed amount. The year before, it took over Daewoo Commercial Vehicles for $102 mn.
Read the Business Standard article.
Tata Group in talks to acquire Sri Lanka's Suntel
The Tata Group is in talks to buy out Suntel, Sri Lanka’s premier private telecom operator, through group company VSNL’s international arm, VSNL Global. VSNL Global recently bagged international long distance (ILD) and internet service provider (ISP) licenses in Sri Lanka, and is hoping to expand inorganically to become an integrated telecom player in the island nation.
If the deal is successful, Suntel will be VSNL’s third telecom service provider outside India. VSNL already has 51% stake in Neotel, South Africa’s second national operator, and is also in the process of picking up 26% in InfraCo, a new telecom network operator in South Africa.
Suntel is the largest fixed-line competitor to incumbent Sri Lanka Telecom (SLT) and has a subscriber base of about 250,000. It offers a range of voice, data, ISDN, dedicated packet solutions and internet services. Suntel is a joint venture between Swedish telecom giant Overseas Telecom, Metrocorp, Townsend of Hong Kong, National Development Bank, and International Finance Corporation (IFC), private equity arm of the World Bank Group. Suntel’s net profit for the six months to June 30 dipped by LKR 93 mn year-on-year to LKR 290 mn, while revenues virtually doubled to LKR 3.31 bn from LKR 1.96 bn a year earlier.
Read The Economic Times article.
If the deal is successful, Suntel will be VSNL’s third telecom service provider outside India. VSNL already has 51% stake in Neotel, South Africa’s second national operator, and is also in the process of picking up 26% in InfraCo, a new telecom network operator in South Africa.
Suntel is the largest fixed-line competitor to incumbent Sri Lanka Telecom (SLT) and has a subscriber base of about 250,000. It offers a range of voice, data, ISDN, dedicated packet solutions and internet services. Suntel is a joint venture between Swedish telecom giant Overseas Telecom, Metrocorp, Townsend of Hong Kong, National Development Bank, and International Finance Corporation (IFC), private equity arm of the World Bank Group. Suntel’s net profit for the six months to June 30 dipped by LKR 93 mn year-on-year to LKR 290 mn, while revenues virtually doubled to LKR 3.31 bn from LKR 1.96 bn a year earlier.
Read The Economic Times article.
Sabre Capital plans $1bn India fund
Sabre Capital Worldwide, Inc. may launch a new $1 bn fund within the next 9-12 months. Sabre had earlier set up an India-specific $350 mn private equity fund. The company has already raised $50 mn of the $350 mn fund. The second and final tranche of capital, which will include the entire balance amount, will be raised by February.
The fund, called Sabre Abraaj, has already made an investment of $16 mn in an unlisted mid-sized infrastructure company based in Hyderabad. The fund is looking at mid-level corporates and may invest in the range of $15-50 mn. About 50-60% of the investors in the fund are from the Middle-East, while the others hail from Europe, the US and East Asia. Though there is a 10-year commitment for investments, the company intends to give at least 2-3 times returns within four years to investors.
Read the Business Standard article.
The fund, called Sabre Abraaj, has already made an investment of $16 mn in an unlisted mid-sized infrastructure company based in Hyderabad. The fund is looking at mid-level corporates and may invest in the range of $15-50 mn. About 50-60% of the investors in the fund are from the Middle-East, while the others hail from Europe, the US and East Asia. Though there is a 10-year commitment for investments, the company intends to give at least 2-3 times returns within four years to investors.
Read the Business Standard article.
Power Finance Corporation IPO to begin on Jan 31; other government power companies to follow soon
The UPA Government has started diluting the centre's stake in major state-owned power companies without resorting to divestment. The Power Finance Corporation (PFC) will offer a 10% additional equity through an Initial Public Offer (IPO) that will open on January 31. The offer would close on February 6. Post offer, the government's equity in the company will be reduced to 89.78%. The PFC hopes to mobilize Rs. 1000 crores through the first public offer of its 11.73 crore shares through a 100% book building process. The company has fixed a price band of Rs. 73 – 85 per share. Book value has been estimated to be Rs. 67 per share. Enam Financial, ICICI Securities and Kotak Mahindra Capital have been retained as the book running lead managers for the issue.
With the PFC IPO opening shortly, the Government's move to mobilize funds for power sector has begun. In the next three months, the centre proposes to dilute its stake in three other major power companies by 10% each. The other companies that are in the process of lining up public offers include Power Grid Corporation of India Ltd (PGCIL), National Hydroelectric Power Corporation (NHPC) and North Eastern Electric Power Company (NEEPCO).
Read the article in The Economic Times.
With the PFC IPO opening shortly, the Government's move to mobilize funds for power sector has begun. In the next three months, the centre proposes to dilute its stake in three other major power companies by 10% each. The other companies that are in the process of lining up public offers include Power Grid Corporation of India Ltd (PGCIL), National Hydroelectric Power Corporation (NHPC) and North Eastern Electric Power Company (NEEPCO).
Read the article in The Economic Times.
OTCEI likely to get equity infusion from foreign bourses
Following the interests shown in the NSE and the BSE by foreign investors, there is news that foreign stock exchanges are now eyeing equity stake in the Over the Counter Exchange of India (OTCEI). The government wants to position the OTCEI on the lines of London's Alternative Investment Market (AIM) by allowing easier corporate governance norms for the exchange, and is now planning to throw a lifeline to the now defunct bourse for small and medium companies.
Accordingly, the government is likely to encourage foreign stock exchanges to buy a strategic stake in the bourse. Recently, officials from the China Shanghai Stock Exchange visited the OTCEI and it is learnt that the Chinese may be willing to buy 5% in the exchange as permitted under current guidelines. It is also learnt that London's AIM and the South Korean Stock Exchange may be willing to buy stakes in the exchange. In addition to relaxing the listing norms on the OTCEI, the government is also likely to increase the eligibility criteria for companies coming out with IPOs.
The OTCEI was incorporated in early 1991, even before the establishment of the NSE in 1994. The forthcoming Budget is likely to name its exclusivity for listing by small and medium enterprises. The Securities and Exchange Board of India (SEBI) has also appointed a sub-committee to study the revival of the OTCEI.
Read more on this in the Business Standard article.
Accordingly, the government is likely to encourage foreign stock exchanges to buy a strategic stake in the bourse. Recently, officials from the China Shanghai Stock Exchange visited the OTCEI and it is learnt that the Chinese may be willing to buy 5% in the exchange as permitted under current guidelines. It is also learnt that London's AIM and the South Korean Stock Exchange may be willing to buy stakes in the exchange. In addition to relaxing the listing norms on the OTCEI, the government is also likely to increase the eligibility criteria for companies coming out with IPOs.
The OTCEI was incorporated in early 1991, even before the establishment of the NSE in 1994. The forthcoming Budget is likely to name its exclusivity for listing by small and medium enterprises. The Securities and Exchange Board of India (SEBI) has also appointed a sub-committee to study the revival of the OTCEI.
Read more on this in the Business Standard article.
Osian's raises Rs. 55 crores via private placement; valued at Rs. 590 crores
Arts and cultural institution Osian’s – Connoisseurs of Art Private Limited has raised Rs. 55 crores through a private equity placement to over five new investors at Rs. 1400 per share. The investors include a major Indian manufacturing company, three investors representing financial institutions and a major Oman-based investor group. The private placement pegs Osian’s valuation at approximately Rs. 590 crores.
In May 2006, when Boston-based investment management firm Venus Capital Management’s 5% stake acquisition for Rs. 11.2 crores at Rs. 560 per share had valued Osian’s at Rs. 224 crores. The latest round of funding will further Osian’s vision to become the first art-cultural institution in the world to go public.
Osian’s list of investors includes famous names such as Shiv Nadar, Kumar Mangalam Birla, Gautam Thapar, Jerry Rao, and Vallabh Bhansali among others. Osian’s was established in 2000 by Neville Tuli, who still holds a majority stake in the company.
The projected PAT for the current financial year is expected to be Rs. 18 crores and Rs. 40 crores for 2007-08. The latest round of fund raising will dilute promoters’ equity by 9.89% and take the capital base of the company to Rs. 4.35 crores.
Osian’s intends to utilize these funds for expansion linked to the Osianama project. The Osianama project involves a complex which will include three film theatres showing the best of cinemas from Asia, the Arab world, Africa and Latin America while making available cutting-edge post-production facilities to the best in the industry, all in the context of a world class museum and archive where its vast art collection will be displayed for the public. Within this growth plan, Osian’s will enter feature film production in the current year.
Read The Economic Times article for more details.
In May 2006, when Boston-based investment management firm Venus Capital Management’s 5% stake acquisition for Rs. 11.2 crores at Rs. 560 per share had valued Osian’s at Rs. 224 crores. The latest round of funding will further Osian’s vision to become the first art-cultural institution in the world to go public.
Osian’s list of investors includes famous names such as Shiv Nadar, Kumar Mangalam Birla, Gautam Thapar, Jerry Rao, and Vallabh Bhansali among others. Osian’s was established in 2000 by Neville Tuli, who still holds a majority stake in the company.
The projected PAT for the current financial year is expected to be Rs. 18 crores and Rs. 40 crores for 2007-08. The latest round of fund raising will dilute promoters’ equity by 9.89% and take the capital base of the company to Rs. 4.35 crores.
Osian’s intends to utilize these funds for expansion linked to the Osianama project. The Osianama project involves a complex which will include three film theatres showing the best of cinemas from Asia, the Arab world, Africa and Latin America while making available cutting-edge post-production facilities to the best in the industry, all in the context of a world class museum and archive where its vast art collection will be displayed for the public. Within this growth plan, Osian’s will enter feature film production in the current year.
Read The Economic Times article for more details.
Indiabulls founder Sameer Gehlaut picks up 25% in BAG Films
Indiabulls co-founder and chairman Sameer Gehlaut has invested in Delhi-based TV and film content company BAG Films. Gehlaut is buying around 25% stake in BAG Films for Rs. 262 mn ($5.7 mn). Gehlaut has been made a preferential allotment of up to 20.25 mn equity shares of Rs. 2 each at a price of Rs. 13 per share. It is now mandatory for Gehlaut to make an offer for a further 20% stake. A fully subscribed open offer would make Gehlaut BAG’s largest shareholder.
The promoters of BAG Films, Rajiv Shukla and Anuradha Prasad own about 37.5% on the expanded equity currently. According to Anuradha Prasad, MD of BAG Films, Gehlaut has come in as a pure financial investor. BAG also plans to invest about Rs. 160 mn in new media and the animation business. Recently, IDBI Bank and Bank of Baroda have picked up 10% each in BAG Films’ radio venture, BAG Infotainment.
For more, refer to the Indiantelevision.com article.
The promoters of BAG Films, Rajiv Shukla and Anuradha Prasad own about 37.5% on the expanded equity currently. According to Anuradha Prasad, MD of BAG Films, Gehlaut has come in as a pure financial investor. BAG also plans to invest about Rs. 160 mn in new media and the animation business. Recently, IDBI Bank and Bank of Baroda have picked up 10% each in BAG Films’ radio venture, BAG Infotainment.
For more, refer to the Indiantelevision.com article.
ACC’s 40% stake in JV acquired by Almatis
Germany-based Almatis GmbH is acquiring 40% stake of cement major ACC in their JV Almatis ACC for an undisclosed price. The Kolkata-based joint venture company would now become a wholly-owned subsidiary of Almatis. Almatis is owned by private equity firm Rhone Capital and Teacher’s Merchant Bank and is the leading global supplier of specialty alumina and its products are used in industries from steel production to electronics. The JV was formed for the first time in 1995 between Alcoa’s aluminium refining business and ACC to produce ceramic and refractory raw materials. Located in Falta in Eastern India, Almatis ACC processes tabular alumina from Europe for the Indian refractory market.
Read The Economic Times article.
Read The Economic Times article.
Emaar-MGF to raise Rs. 13,000 crores in IPO
Emaar-MGF, the real estate JV between Dubai-based Emaar Properties and Delhi’s MGF Developments, is planning to follow in the footsteps of peer real estate major DLF. The company is set to raise around Rs. 13,000 crores from the capital markets to fund its rapidly growing property development business in India. The Emaar-MGF IPO is expected to hit the markets in the second half of 2007.
Emaar-MGF has projects in over 30 cities in residential, commercial, infrastructure, hospitality sectors and special economic zones across India. According to company estimates, it would require $4 bn to fund these projects, of which $1 bn was brought in through foreign direct investment last year. The company is hoping to raise the rest of the capital through the IPO and private placement.
Read the Business Standard article.
Emaar-MGF has projects in over 30 cities in residential, commercial, infrastructure, hospitality sectors and special economic zones across India. According to company estimates, it would require $4 bn to fund these projects, of which $1 bn was brought in through foreign direct investment last year. The company is hoping to raise the rest of the capital through the IPO and private placement.
Read the Business Standard article.
Subscribe to:
Posts (Atom)