Tuesday, March 27, 2007

SEBI, RBI conduct studies for regulating PE funds

If media reports are to be believed, then private equity funds are in for a tough time ahead in the Indian markets. PE funds may come under the regulatory scanner in India, and though the ultimate regulator has not been decided upon, both Securities and Exchange Board of India (SEBI) and Reserve Bank of India (RBI) have formed study groups to analyze the structure and impact of such funds on the investors, the companies in which they invest in and their effect on corporate governance.

The issue has gained importance as a working group of International Organisation of Securities Commission (IOSCO) has been set up to study the impact of private equity funds on emerging markets. The Indian market regulator is the chairman of IOSCO’s emerging market committee, and will also have consultative discussions with other regulators during the 32nd annual conference of IOSCO to be hosted by SEBI in India this year.

Based on the joint findings of the study, the regulators may issue guidelines for listing and registration of such funds, for ensuring better monitoring. The purpose of the study is to ascertain if the actual investors in a private equity fund are loosing out during leveraged buyouts, de-listing and re-listing of the company.

Read more in the Business Standard article.

TCS sells 40% stake Sitel India to JV partner Sitel for $17.73 mn

Business Standard reports that Tata Consultancy Services has divested its 40% stake in the BPO firm Sitel India to US-based Sitel Corporation for $17.732 mn. Sitel India is a joint venture between the Tata Group and Sitel Corporation, formed in 2000, with both parties holding 50% of the equity. Tata International, which holds 10% stake in the JV, has also agreed to sell its stake. The joint venture company provides voice-based contact centre BPO services from India. With over 4000 professionals, the JV is a provider of fully integrated customer care and back office processing services operating from five centers in Mumbai, Hyderabad, Chennai and Gurgaon.

Marwadi Shares raises second round of funding from UK-based Caledonia Investments

Rajkot-based equity broking house Marwadi Shares & Finance Limited has completed a second round of private equity placement from another UK-based Caledonia Investments Plc, after its first phase of investment from India Capital Growth Fund Limited in December 2006. Caledonia Investments has picked up a 19.67% stake in Marwadi Shares for around Rs. 42 crores. Marwadi Shares and Finance is a decade-old financial services group offering stock broking and commodity broking firm on the NSE, BSE, NCDEX and MCX.

Marwadi Shares has emerged as the fifth broking house in the country and the first broking house from Gujarat to have private equity placement from a foreign player. It had initially planned a route into the capital markets and raise about Rs. 60 crores through and initial public offering, but postponed the plan and instead decided to raise funds through private equity placement. The company has now revised its equity raising pattern from Rs. 60 crores to Rs. 73.5 crores and has managed to disburse a 33% stake.

Read the article in Business Standard.
Related Post:
Rajkot-based broking house gets PE funding from UK-based India Capital Growth Fund