Friday, March 14, 2008

Reality Major's REIT plans delayed

IndiaBulls RealEstate and Unitech Ltd. have put their Singapore REIT plans on hold siting volatile market conditions. DLF may follow too.

Unitech, IBREALEST & DLF had lined up a $0.5Bn,$1Bn & $1.5Bn. offer. Unitech and IBREALEST were exploring private placement, according to Business Standard. DLF too might delay the offer or go for $500Mn. private placement.

Indian developers, hit by soaring land costs and curbs on bank loans, are looking to tap REITs, which are not yet allowed in India, although draft guidelines for them were issued in December.

Read the article on Mint

New Mineral Policy

The National Mineral Policy (NMP) 2008, approved by the Cabinet last night, will reduce time delays in disposing off mining applications, boost FDI and "protect risk capital by providing automatic minning rights to miners".
The Cabinet aproved the policy after factoring in the recommendations by the high-level committee and other policy authorities at state level. Delays in ensuring mining leases is believed to be a key reason behind meagre investments in the sector, which the new policy aims to address.

He pointed out that the mineral-rich states of Orissa, Chhattisgarh, Jharkhand and Orissa would be given little more than a year to decide on the merit of the mining lease applications. If these states remain undecided by that period, the applications would be decided the Mining Tribunals, Minister of State for Mines T Subbarami Reddy added.

The Cabinet has also approved setting up of Mining Administrative Appellate Tribunal (MAAT), within six months. The minning states meanwhile will get higher royalty. The status of their demand for ad-valorem based royalty structure and share of export levy is unclear.

Nexus India Capital invests in Organic Farming

Nexus India Capital has invested in Suminter India Organics, a leading contract farming company that focuses on organic produce for the textile and food industries.
Nexus, a $100-million fund, has so far invested in technology, mostly internet and wireless companies. This investment in farming is first of it's kind on the space and may have to do with special emphasis in recent budget on VC investments in this sector.

Sandeep Singhal, Managing Director, Nexus India Capital Advisors, spoke about a huge potential demand for organic products globally.
Suminter, which supplies to buyers in the US and Europe, currently has a farmer network in four Indian states, across 25,000 acres of land. Its network of farmers grow cotton, oil seeds, spices and herbs, in accordance with buyers demand. The company plans to expand its reach to ten Indian states. It will also set up an organic food park with high-end machinery for processing.

As posted here previously, it seems the money is headed for the farms.

Promethean Raises India Focussed SPAC

The founders of the UK-listed investment firm Promethean have raised a $200 million special purpose acquisition company (SPAC) called Atlas Acquisition Holdings in the US, the largest ever SPAC targeted prominently at India.

Atlas Acquisition Holdings raised $200 million (Rs 800 crore) through the American Stock Exchange, the hub of global SPACs.

Though the SPAC does not mention in its offer document any geography or sector it would target, it is understood that Atlas is looking at businesses which have an India story. According to sources in the merchant banking industry, Atlas would eye a minimum deal value of around $500 million which could include funds raised by it as a SPAC and would be backed by debt. However, Atlas could even scout for bigger deals which could go upto $1 billion in enterprise value.

Atlas is led by its chairman & CEO James Hauslein, along with Gaurav Burman, part of the Dabur Group and also a key member of Promethean India. Promethean India is an AIM-listed investment firm with a corpus of $115 million, which targets Indian companies to pick small private equity stakes.

The funds raised by Atlas are large, even by US standards where SPACs size in general is around $100 million or lower. As per the data compiled by US-based investment banking firm CRT Capital, out of the total 142 SPACs raised in the US till early February 2008, only 30, including Atlas, raised $200 million or more.

As reported in Economic Times

Blackstone Buys Pre-IPO stake in Titagarh Wagons

PE fund Blackstone has picked up a minority interest in Titagarh Wagons for Rs 672 a share in a pre-IPO placement. Blackstone bought 2.35 lakh shares for around Rs 16 crore from the Strategic Ventures Fund (Mauritius). The Mauritius-based company bought equity in Titagarh in July 2005 for Rs 976 a share. But its acquisition cost came down, following an 1:8 bonus issue.

Blackstone is the fifth major investor to put money in Titagarh Wagons. The other investors include GE Capital Infrastructure (15%), JP Morgan (5%), 2i Capital (6%) and ChrysCapital (6.5%). The Chowdharys, the promoter group, holds a 57% stake.

Kolkata-based Titagarh Wagons will sell 23.8 lakh shares in the primary market through an entirely book-built issue. The company will sell 20.68 lakh fresh shares while two investors will offer 3.15 lakh shares through the issue.

Titagarh Wagons is a leading railway freight wagon manufacturer. It makes railway wagons, balley bridges, heavy earth moving and mining equipment, steel and SG iron castings. It is one of the approved vendors for defence manufacturing as an ‘industry partner’ to the DRDO.

Singpore's BAF Spectrum seed fund enters India

Singapore-based BAF Spectrum Pte Ltd made its first India investment last week in Gurgaon-based Le Travenues Technology Pvt. Ltd running the travel search engine IXIGO.COM
BAF is a collaboration between private investors & Singapore government. It's the second investor at the pre-series A (first round) funding stage to enter the Indian market in the last month. Earlier, Singularity Ventures backed by West Asian investors launched operations in the country.

The firm, which typically invests between $500,000 (Rs2 crore) and $1 million, has a dedicated corpus of $14 million. Thus far, it has funded five companies headquartered in Singapore.

Several companies in the online travel space here have received funding in the last two years, including Bangalore-based Yatra Online Pvt. Ltd, Mumbai-based Cleartrip Travel Services Pvt. Ltd and New Delhi-based Makemytrip India Pvt. Ltd.

Over the last 12-18 months, many sources of seed capital have sprung up, including New Delhi-based India Angel Network, Mumbai-based Seedfund and Mumbai Angel Network and Bangalore-based Erasmic Venture Fund.
The Singapore government, under its Business Angel scheme (BAF comes under this), grants $7 million angel money to be invested in start-ups to a group of private investors on the condition that they match the amount with their own capital. As an incentive, the government returns a third of its profits on exits to the investors. It is a hybrid model that combines the Band of Angels mode of investment with government grant distribution. In markets outside Singapore, the angels put in their own money.
The full article can be read on Mint