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American Tower closing in on Tata Tele stake

2008-04-03T16:52:00.002+05:30

Relief at last, for the underdog Tata Tele..DNA writes that American Tower Company (ATC) is believed to be the frontrunner among the bidders for investing in the tower firm of Tata Teleservices. Sources suggest a valuation of $2 Bn. from Tata Tele side.

Tata Teleservices MD Anil Sardana says divesture in the tower company would be concluded by the end of May. Tata Tele wants to divest between 26% and 49%. According to the company, around 15 strategic investors were shortlisted for picking up a stake in the hived-off tower entity of Tata Tele.

Indus Towers, the JV tower company between Bharti, Vodafone and Idea, may also look at divesting some of its stake to strategic investors. Bharti Airtel, Vodafone-Essar and Idea merged their tower assets in 16 circles to form an independent tower company Indus Towers. Bharti and Vodafone have 42% stake each in the company while Idea Cellular holds 16% in it.

Kapil Puri to sell off Sparsh stake

2008-04-02T17:24:00.004+05:30

Kapil Puri, original promoter of Sparsh BPO, now owned by Blackstone controlled Intelenet, has decided to sell his residual stake of 12%.

Intelenet is awaiting regulatory approvals for the buyback. Puri intends to offer it all to intelenet, but incase of a spillover, will selloff to outsiders.

The sell off comes as he heads to develop Spanco's new BPO business after the may2007 no compete agreement has expired. Spanco's new BPO has already clocked Rs.35 Cr. of revenue

Intelenet, itself, has undergone a key change after buying out Sparsh. It went through a management buyout backed by PE firm Blackstone, which now owns 80% stake in the company

Reports ET

Graffiti

2008-04-02T13:39:00.003+05:30

Global M&A trend. Where do you see it headed this year? The writting's on the wall.

Graph courtesy DealBook

Yatra invests 6.69 Mn in Saket for 26.05%

2008-04-02T11:08:00.002+05:30

CNBC reports that Yatra Capital Ltd. has invested 6.69 Mn. euros for a 26.05 % in Saket Engineers Pvt. Ltd, a Hyderabad-based residential real estate development company.

Yatra Capital said with this, it now has invested in 12 deals and has used 153.03 million euros of the 220 million euros it has earmarked for investments in the Indian real estate market.

JM buys rest of ASK in the broking JV

2008-04-01T19:52:00.003+05:30

JM Financial took over the other 40% of JM Financial ASK Securities to become 100% owner of the same. The deal was struck at 81 Cr.

For JM the priority is "providing all financial products under one roof" while for ASK it means "focus more on the portfolio mangement and wealth advisory business in future".
ASK is awaiting for clearance from SEBI for its proposed asset management business.
Read ET

The Financial Crowd : Barclays & PFC

2008-04-01T19:04:00.004+05:30

It is our belief that financial sector in India will become broader and deeper. We will report this in a section called The Financial Crowd. And we will cheer, when one is added in The Financial Crowd.

Reuters reports through ET that Barclays will set up 100 strong private bank to serve rich enterpreneurs. "We have a successful investment bank in India and we have a very good offshore business with Indian clients and we are building an onshore private bank in India. The economy is growing at an incredible pace,” said Tom Kalaris, the chief executive of Barclays Wealth Management.

PFC on Monday floated a wholly-owned consultancy arm, PFC Consulting Ltd. to provide services in the power sector. PFC Consulting will provide services related to UMPP, including formation of special purpose vehicle. It would also conduct bidding process for awarding projects of state utilities.

Prozone sells 27% to Triangle Real Estate

2008-04-01T17:29:00.004+05:30

Prozone Enterprises has sold a 27% stake in its realestate subsidiary to Triangle Real Estate India Fund for a total consideration of Rs 457 Cr.The subsidiary holds stake in four projects that being developed in Aurangabad, Indore, Nagpur and Jaipur covering approximately 16 million sq.ft.

Triangle Real Estate India Fund is co-promoted by ICS group and Old Mutual Investment Group Property Investments, the property division of Old Mutual.

Prozone Enterprises, is a joint venture between apparel maker Provogue (India) and UK-based Liberty International.

ICICI prepares for a pre-ipo placement

2008-04-01T13:50:00.004+05:30

ICICI is looking for to pre-IPO placement of equity and Global FIs such as Goldman Sachs, Morgan Stanley, JP Morgan, Credit Suisse and Nomura among others are in line.

Apprantely 12-15 interests have been received and the deal will be sealed shortly.JP Morgan is the advisor for the pre-IPO placement while merchant bankers for the IPO have not yet been finalised. Sources believe I-Sec is valued at $7.5 Bn or 30,000 Cr, highest valuation for an I-Bank in India.

In February 2007, JM Financial had sold its 49 per cent stake in JM Morgan Stanley Securities for $445 million. The deal valued the entity at $908 million against DSP Merrill Lynch’s valuation of $1 billion, when Merrill bought out Hemendra Kothari’s 47 per cent stake in December 2005.

As reported by Business Standard

GS India buys another NBFC

2008-03-28T18:07:00.000+05:30

Goldman Sachs India is on the verge of acquiring Pratham Investment and Trading, a Mumbai-based NBFC.

Goldman Sachs will invest INR2 billion in the firm, through Goldman Sachs (Mauritius) NBFC LLC. The company plans to invest $7.5 million upfront and the balance $42.5 million in the next 24 months or so, the ET report said.

Goldman Sachs India expanion has stated goal of buying NBFCs.

Mallya Wants Heinken's 37.5% Stake

2008-03-28T14:37:00.001+05:30

Liquor baron Mallya is open & willing to buy 37.5% of heinken's share in UB. At this point both have equal stakes. Mallya says, "At today's price, I am a buyer".

Heinken get's its stake in UB from Scottish & NewCastle (S&N) after the worldwide takeover of the British brewer. The heinken-carlsberg combined takeover of S&N for $15.4 Bn was announced in jan.

Mr Mallya says Heineken is not yet a shareholder in UB pending global transaction. “My business agreement was with S&N, and Heineken will have to renegotiate a charter of rights. I cannot speculate on the outcome of our discussions,” he added.

Heinken's beer business is a direct conflict with UB's Kingfisher beer. Heinken is also a leading shareholder in Asia Pacific Breweries, makers of Tiger Beer, another competition to Kingfisher. According to a banker S&N's business charter agreement is not transferrable to Heinken, and that's where Mallya's leverage will come from.

report from ET

SEBI's effort at decoupling

2008-03-28T12:22:00.002+05:30

With all the theorist of decoupling debating on it's merits, SEBI seems to be finding a way to implementing it.

SEBI is proposing a margin payment from Institutional Investors from April 21 onwards.

Only Korea & Taiwan, of all Asian markets, require margins on high beta stocks.
The other spin to the story could be "Level Field", with retail,HNI and corporates having to pay 50% margin in the cash markets. With the proposed upfront T+1 margin collection, trading churn will reduce due to a portion of funds locked in margins. Is this an attempt to regulate financial markets to avoid slingers? May be. But the consequence is on risk, as conservative institutions like pension funds will be unwilling to pay advance for shares (margin payment on T+1, shares received on T+2).

The move is finding supporters (though from conservative folks ). Abhay Aima, Equity Head of HDFC says "Fair move, as more players come in & risk rises, market needs safeguards". Ved Prakash Chaturvedi, MD, Tata AMC says "This will reduce the amplitude of swings"

Kotak raises $440 Mn. for PE buys

2008-03-28T11:57:00.004+05:30

Kotak Investment Advisory ltd. has raised $440 Mn. in its PE fund, taking the corpus to $1.4 Bn. It will continue it's focus on small & medium enterprises with a sweet spot in the range of $10-$30 Mn.

C. Jayaram, head of KIAL says the India story is so strong that it has percolated even the scandinavian countries. Another $250 Mn. will be raised from oversees investors by september.

KIAL is organised under two heads. Real Estate & PE. The PE group has two other funds, a $160-million fund that invests across sectors and a $68-million fund focused only on biotech. With the closure of the third fund, KIAL now has approximately equal amounts in both groups. It intends to launch a third group focussed only on investments in the core infrastructure sector with a corpus of $1 billion.

reports ET

TechWave : DataCenter Story Rolls On With Ctrl S

2008-03-27T17:48:00.005+05:30

Ctrl S Data Centers, promoted by the Pioneer Group along with IDBI and Och-Ziff will set up 4 tier-IV data centers in India, investing $250 Mn. over 2-3 years.

The Asian Data Centre market is expected to grow at CAGR 11.5 % over 2006 -10 with India emerging as the fastest growing market. The coming of around 50 Telcos is creating demand for datacenters.

All other current facilities are tier-II or III, a lowver version. A tier-IV costs 30-40% higher.

This is a part of new technology wave likely to hit India after software & BPO sector having matured, called Remote Infrastructure Management.

Reported by ET

Red Fort Capital Plans $800 Mn. Real Estate Fund

2008-03-24T17:34:00.003+05:30

Red Fort Capital will launch second in the series offshore fund, Red Fort India Real Estate Fund II next month with size of $800 Mn.

The fund will invest in FDI-compliant projects in the residential, commercial, retail and hospitality sectors and has an investment threshold of Rs 40 crore ($10 million). ‘’We are expecting returns of 30 per cent,’’ said Subhash Bedi, partner. Red Fort has also received approvals for domestic realestate fund.

Red Fort India Real Estate Fund I has given returns in excess of 55%.

A host of global private equity players, including Blackstone, Citigroup, Morgan Stanley and Tishman Speyer and domestic funds of ICICI, Kotak and HDFC, has committed or invested nearly Rs 20,000 crore ($5 billion) in the Indian realty sector.

The CDS Iceberg

2008-03-24T14:07:00.004+05:30

Two graphs from NY Times that put into perspective the seriousness of the issue.

India on Kuwait Finance House's Radar

2008-03-24T12:29:00.004+05:30

In this Bloomberg interview, CEO & GM of Kuwait Finance House Mr. Mohammed Sulaiman Al-Omar spoke about his plans for expansion into GCC & India-China markets. "We have to be there, whether or not they have the legal infrastructure and environment for Islamic banking. "

"India is going through major economic changes. The purchasing power of the middle income has increased. They have a lot of demand for real estate, hotels and services, industrial parks, office buildings. They have heavy, light-to- medium industries. All of it comes into one basket and it is a very good market. We can do investment activities for our accounts, for our clients in terms of funds and that could be in direct investment or real estate".

As has often been commented, he added "GCC countries have a good sizeable income after oil prices rose to more than $100. That has created good liquidity in the market. GCC countries have tremendous inflows.''

Unitech to raise $500 Mn. from Lehman, Deutsche Bank

2008-03-24T11:28:00.006+05:30

Lehman Brothers & Deutsche Bank will invest $500 Mn. in a Unitech SPV.

A source suggests talks are in advanced stage for two commercial projects at Santa Cruz (Mumbai), for developable office space of 2Mn. Sq.Ft. The deal might close in 3 weeks.

This project will be a Unitech first in Mumbai, as the firm gets aggressive outside NCR, it's home zone.

Poor market conditions, and reducing funding options have been hard on realestate companies, but everyone loves a good deal.

Read the full story on ET

Bajaj Capital To Expand With $50 Mn.

2008-03-24T10:13:00.003+05:30

Bajaj Capital is planning to raise $50 Mn. to expand it's network. Bajaj Capital is a 4 decade old investment advisory & financial planning firm owned by KK Bajaj.

Sources indicate that Citigroup Venture Capital and Barings Private Equity are among the funds which have shown inclination to fund Bajaj Capital. In addition to being an investment advisory and financial planning company, Bajaj Capital is also a Sebi-approved Category-I Merchant Banker.

The company currently has 170 outlets across the country and is understood to be expanding. Early this year, Bajaj Capital started online trading under the Just Trade brand, which also offers online investment advisory services.

As reported in Business Standard

CRISIL to relook ratings

2008-03-24T10:02:00.003+05:30

CRISIL is taking a re-look at ratings it assigned to debt issued by Indian Arms of 27 global financial institutions.

The ratings here derived support from parent ratings in western markets, which have now undergone change. They need revision to reflect several downgrades in the western markets.

Some of the financial entities rated by Crisil for their domestic operations include ABN Amro Bank, ABN Amro Securities, Barclays Bank, Citibank, Citicorp Financial, Citicorp Capital Markets, DSB Bank, Deutsche Bank, DSP Merrill Lynch, GE Capital Services, JP Morgan, Rabo India, Standard Chartered Bank, Bank of Nova Scotia and HSBC. Reports ET

PE Funds Waiting For Bargains

2008-03-19T18:45:00.003+05:30

Mint here is first with a story on what was expected. PE deals down, but funds sure that companies are undergoing customary 3-4 month valuation adjustments before they line up for funds.

Also, Richard Heald, partner and MD of NM Rothschild and Sons. “During this period (of declining stock valuations), there will be more PIPE (private investment in public equity) transactions happening globally.”

“Deal prices remain high,” said John Levack, MD,Electra Partners Asia Ltd, "we will stay away from the Indian market and concentrate on deal opportunities in some other Asian markets in the short term".

Manu Punnoose, chief executive of PE fund Subhkam Ventures, added that “PE will get larger stakes (in pre-IPO deals)…but the holding time will be longer, around 3-4 years”. Nitin Deshmukh, head of Kotak Private Equity Group. “From a momentum play, we are getting into a value play.”

For more opinions on PE trends go to Mint Article

West Asia Pulls The Plug On Indian Power Projects

2008-03-19T18:17:00.005+05:30

India Inc's effort to raise $6Bn. of funding from West Asian countries doesnt seem to be working.

According to a Central Govt. official,"After one & half year it's going nowhere with they not intrested in equity participation and Indian company's not interested in the interest rates demanded".

NTPC Ltd, National Hydroelectric Power Corp. Ltd, and Power Grid Corp. of India Ltd were targeting investments from West Asia backed by power ministry’s initiative to politically and economically engage these countries on PMO's direction.

The move would have ensured supply lines, especially . The initial focus was to attract investments from Saudi Arabia, Qatar, United Arab Emirates and Kuwait; Bahrain and Oman were to be targeted later.Each of the three companies was given an investment target of $2 billion.

However the SWFs of these nations have been busy with "better opportunities". Add to this a probable reluctance of these countries to expose themselves to Energy Demands (in their own investments) in current tight environment, has meant GoI's plans not working.

Read the article on Mint

HDFC to raise $1Bn. for buying HDFC bank equity

2008-03-19T16:26:00.004+05:30

This Business Standard article reports HDFC raising $1 Bn. debt finance for it's stake purchase in HDFC Bank over 18 months.

Fresh equity issuance being ruled out, raising debt remains only recourse.

HDFC Bank acquired Centurion Bank of Punjab in an all-stock deal. Following this, HDFC Bank announced a private placement of equity to HDFC to enable the mortgage lender to maintain its stake at the current level of 23.3%. This entails an investment of almost $ 1 billion by HDFC.

I hope market liquidating financing mechanisms are avoided (e.g Orchid Chemicals)

Cairn raises 2534 Cr. with 5.37% stake sale

2008-03-19T16:13:00.003+05:30

Cairn India, Indian arm of British O&G co. Cairn Energy decided to sell 5.37% to Malaysian Petronas, and Singapore-based Orient Global Tamarind Fund for Rs 2,534 crore ($625 million) for funding Capex.

Of the 113Mn. shares, 63.3 Mn shares go to Petronas & 49.7 Mn to Tamarind at Rs.224.3 each with a 1 year lockin. Funds will be utilised for capex at Mangala, Rajasthan, by next year.

For details of Cairn Operations read Business Standard.

No bidder for BKC Plot

2008-03-19T12:59:00.004+05:30

MMRDA failed to get bids for two of the five plots that it auctioned in the Bandra-Kurla Complex (BKC).

For a commercial plot with a total developable area of 24,000 sq metres, the authority received around Rs 3.4 lakh per sq metre, only 14 per cent more than the reserve price of Rs 3 lakh per sq metre. Jet bought this bought as a sole bidder, to build its global headquarters. This is in mighty contrast to Rs 5.04 lakh per sq metre, the highest in the country to date, by Mumbai-based developer Wadhwa Builders for an MMRDA plot in November 2007.

Read BS article for more indication of sweet slowdown in realty.

Baring acquires 12% in Sharekhan

2008-03-19T11:05:00.003+05:30

Baring Private Equity beat Merill Lynch to acquire 12% stake in Sharekhan for Rs.240 Cr.

The transaction is mixed secondary sale by Citigroup Venture Capital and additional infusion of capital.Last year, CVC along with IDFC had invested around Rs 650 crore to pick 85% stake in Sharekhan.CVC owns 75% in Sharekhan while IDFC holds 10% and the management and employees hold the remaining 15%.

Last year, CVC and IDFC together had acquired 37% equity owned by Sharekhan promoter Shripal Morakhia while 48% was acquired from other shareholders including GE, Intel Capital and some funds advised by HSBC PE India.

A private equity firm holding substantial equity stake in an unlisted company would be classified as a promoter. If that company goes public, the PE firm’s shares would have a lock-in period and cannot exit for a certain period. This could be one reason why CVC intends to dilute its stake, though it could not be verified independently (We suspect a hole in the books was discovered during due delligence and the promoter asked to make up. I would try to do some molework)

Baring earlier took exposure in the sector picking 44.8% in JRG Securities for $35 million (Rs 140 crore) about a year ago.

Go to Economic Times here

National Investment Fund Declared as QIB

2008-03-18T18:50:00.003+05:30

In what could be a slow begining towards an Indian SWF, a SEBI Press release included National Investment Fund (NIF), a fund set up by the Government of India vide Gazette Notification no. F. No. 2/3/2005-DD-II dated November, 23, 2005 in the definition of QIB.

NIF is a fund consisting of the proceeds from disinvestment of Central Public Sector Undertakings, which would invest in equity in accordance with broad investment guidelines provided by the Government of India.

Osian`s sells 9.4% stake to PE firm

2008-03-18T18:39:00.003+05:30

Osian’s Connoisseurs of Art will sell 9.4 per cent stake to Abraaj Capital, Dubai-based PE firm, for Rs 80 crore. Arif Masood Naqvi, VCM & group CEO Abraaj, will join the Osian’s board.

The Neville Tuli founded unique private-sector art institution straddling various sectors of art, films and lately, sports.

Osian has an archive of visual and textual material which includes rare etchings, lithographs, maps of India, British Indian photography, popular art, cinema publicity material. Having acquired Minerva theatre in Mumbai in 2006, where it is building Osianama, a museum for cinema and the arts, the company has also ventured into film production.

Osian also has an art fund, floated in 2006, with a corpus of Rs 100 crore. The company is looking at a public listing in 2009.

Osian’s has 48 other stake holders besides Neville, with none holding more than 5 per cent. These include Shiv and Kiran Nadar, Sanjeev Khandelwal, Gautam Thapar, Kumarmangalam Birla, Kito de Boer, Kamal Morarka, Sangita Kathiwada, Jerry Rao, Priya Paul and Ashok Alexander, among others.
“Each has been buying from 2001 when shares started at Rs 30 and thereafter many placements every year at Rs 90, Rs 180, Rs 360, Rs 540, Rs 1,000, Rs 1,200 and Rs 1,600.”

As reported in Business Standard

MFI gets funding from Unitus

2008-03-18T17:40:00.003+05:30

MokshaYug Access (MYA) has received funding of Rs 8.35 crore ($2 million) from a private equity fund Unitus Equity Fund L P (UEF), a Unitus entity to support MFIs in Asia & LatAm.

MYA follows dual aim of developing rural entrepreneurial Self Help Groups & through them providing penetration to urban product & service providers.

Segments MYA focusses on are manpower, infrastructure and community participation- that can be used to increase efficiencies in the delivery of services such as dairy farming, livelihoods, healthcare and agribusiness to the rural households.

In 2006, it tied up with ICICI bank on a ‘partnership model’, through which the MFI identified the Self Help Groups (SHGs eligible for the loan. The bank then channeled the loan through the MFI, against 10 % of the amount held as security. This arrangement has been particularly cost-effective for lenders since loan identification, disbursement and recovery aspects are outsourced to MFIs who are know the local market.

PE-VC funds may be deemed FDI

2008-03-18T17:05:00.003+05:30

According to a latest draft put up on RBI site for public comment, various classes of investors have been broadened with specific mention of PE & VC funds.

"Secondly, the details of investment received in units of venture capital funds from FVCIs are proposed to be separately captured."

Details of investment received from foreign venture capital investors are also proposed to be captured separately. Part B of Form FC-GPR has been modified to capture details of such foreign investors. The date of filing Part B of the form has been extended from June 30 of every year to July 31.

FDI is permitted under automatic & approval route. An Indian company issuing shares and convertible debentures to non-residents under either route is required to submit details of the investment in a two-stage reporting procedure.

In the first stage, receipt of funds is to be reported to RBI within 30 days. In the second stage, the company has to file Form FC-GPR with RBI within 30 days from the date of issuing shares/convertible debentures.
Form FC-GPR was revised in April 2007 by which remittance receiving Indian banks were required to obtain a KYC report on the foreign investor from the overseas bank remitting the amount.

Go to Financial Express for the complete article

Future Capital picks 70% in Godrej's rural initiative

2008-03-18T16:16:00.003+05:30

Future Capital takes a step ahead in it's Rural Retail Masterplan with a 70% stake buyout from Godrej's Aadhar, a part of Godrej Agrovet, which will be spun off into an SPV. The Future Group will intially scale up Aadhar as supply chain of agricommodities. Aadhar may also become a distributor of financial products and consumer finance.

Both Mr. Biyani & Goderej refused to comment on the deal.

About Aadhar

Aadhaar offers an array of products and services to rural households including basic food, grocery, apparel, footwear, furniture, kitchenware, home appliances, banking, postal services and pharmacy. The first Aadhaar outlet opened in December 2003 in Pune district. Since then, 50-60 Godrej Aadhaar Centre outlets have been set up across Maharashtra, Gujarat, Punjab, Haryana, Andhra Pradesh, Tamil Nadu, Orissa and West Bengal. It launched the outlets as a hub-and-spoke model, with 10,000-square foot outlets catering to various consumers in the countryside.

About Godrej Agrovet

Godrej Agrovet is a key player in the farm segment with a large presence in cattle and poultry feeds. In recent months, the group has been evaluating various rural initiatives as part of a larger plan to step up retailing in the hinterlands.

RBI Responds : FOREX Derivative Cap May Arrive

2008-03-17T13:59:00.002+05:30

The RBI has called for data from banks to assess their expsoure to FOREX derivatives in domestic & overseas markets.
Local exposure mainly relates to interest rate and currency options and swaps while international investment includes credit derivative structures like credit-linked notes based on foreign currency loans and bonds raised by Indian companies abroad. RBI has asked banks to limit their capital market exposure to 40 per cent of their net worth, with direct exposure limited to 20 per cent.
As part of the proposed valuation norms, RBI could also ask banks to mark to market the derivative portfolio maintained in the held-to-maturity (HTM) category.

MTNL planning 50% stake offload in SunTel

2008-03-17T11:46:00.003+05:30

In a case of wagging the dog by it's tail, MTNL, one of the shortlisted preferred bidder for Srilankan TelCo SUNTEL, is in talks for offloading 50% stake. As a 100% MTNL subsidiary SUNTEL would be subject to MTNL policies & practices and "SunTel is a profit making professionally run company, and MTNL doesnt want to change its working".

The PSU, which is a JV partner in Nepal’s United Telecom and also offers telecom services in Mauritius through its 100% subsidiary, has been scouting global markets for new licences to make up for shrinking local opportunities.

MTNL has lost its bid to acquire Telekom Kenya & failed to win mobile licences in Saudi Arabia, Qatar, Bhutan and several other countries. However second chance is around the corner— Qatar, Lebanon, Oman, Bahrain, Iran and Turkey are set to auction fresh mobile licences in the coming months.

As reported in Economic Times

Tommy eyes 51% in Indian Business

2008-03-17T11:18:00.004+05:30

Tommy Hilfiger, controlled by buyout private equity Apax Partners, is looking at direct ownership of its India operations by bringing in the maximum permissible 51% foreign direct investment (FDI) allowed in single brand retail.

Tommy is looking for direct ownership, buying out perpetual India rights, currently with the Murjani Group.

The Murjanis invested in young Tommy Hilfiger when the American designer introduced his first signature collection back in 1985.

The Murjanis operate Tommy Hilfiger’s core fashion apparel business through an equal joint venture with Arvind Mills, which has 23 outlets across the country at present. The Murjanis have inked similar licensing deals with other Indian corporates like Titan Industries for watches and Welspun for home furnishings. The Murjanis, through their Brand Marketing India Pvt. Ltd. are pumping investment to develop other international fashion brands like Gucci, Jimmy Choo and French Connection. BMI recently raised $10 million through a private placement with VC fund Matrix Partners, for the cash burning realestate intensive business.

Rahejas to raise Rs.530 Cr. from PE funds

2008-03-15T17:22:00.007+05:30

New Delhi based Rahejas plan to raise Rs.530 Cr. from PE funds against 26% equity in their upcoming Gurgaon based engineering SEZ.

MD Navin Raheja said the group was talking to Royal Group of Abu Dhabi, Ford Capital, Ascendas, Blackstone & Carlyle with E&Y as consultant. He said " Though the deal is not finalised we prefer Royal group because of their bigger projects, construction techniques, equipment & manpower"

The JV will be as an SPV to be listed later. The company plans to invest Rs 4,535 crore in the SEZ to be funded with a mix of equity, debt and internal accruals. It has plans to build country's tallest building here. Since haryana faces power shortage, the company is planning a 200MW captive powerplant and is in talks with Adani & Lanco.

Quippo, Oil & Gas Service Sector and A New PE Hotbed

2008-03-15T16:54:00.004+05:30

Quippo Oil & Gas, a subsidiary of Quippo Infrastructure Equipment promoted by SREI Infrastructure Finance, is planning to put Rs.2400 Cr. over next two years in buying onshore rigs, off-shore supply vessels and pipe-laying barges.

Quippo Oil & Gas currently owns two onshore drilling rigs and one offshore pipeline-laying barge (bought for $120 Mn.) The plans are to deploy these to India & Malaysia. This Business Standard article reemphasises a global trend in O&G service sector.

There is a shortage of rigs across the world and its impact is being felt in India as well. The Oil & Gas service sector market is booming globally with M&A/PE activity.

Globally PE firms are active in the O&G service market due to crash and easing valuations, specially in the mid-market. Tight credit markets have put brake on largecap deals but middle market is growing 50%.

Richard Spears, VP of energy analysis and advisory firm Spears & Associates Inc. says "Right now, we have projects for 15 deals under way, when last year, at any one time, we had six or seven." Investors and companies hire Spears to analyze businesses during the due diligence process of a transaction. Spears said his private equity clients were sizing up businesses in well completion services, land and offshore drilling and production, and other parts of the oilfield services sector.

Some of the recent deals in the sector include First Reserve Corp buyout CHC Helicopter Corp for $1.5 Bn., US buyout firm Castle Harlan's Anchor Drilling Fluids US for $250 Mn.

Analyst Bill Herbert of research firm Simmons & Co said expects PE firms to snap up more small-cap oilfield service companies with either international franchises or technology that can be exported to international markets.

It will not be surprising to see some of the Infrastructure Funds moving in, on the sector.

RBI lifts PwC Ban

2008-03-15T14:42:00.004+05:30

RBI lifted ban on PwC auditing banks & NBFCs.

PwC was banned from auditing banks and NBFCs following its association with the now failed Global Trust Bank as its auditor for financial years 2002 and 2003. RBI had found that PwC underprovided for NPAs.

GTB eroded networth due to over exposure to Capital Markets. It tried to make up for the capital by roping in Newbridge Capital, but RBI disapproved on grounds of questionable source of money. Since bank was not able to make up for capital, it was put under moratorium and then a quick takeover by OCB.

Blackstone eyeing 10% in Ennore Foundries

2008-03-15T14:32:00.003+05:30

Blackstone & Primus Capital are racing to acquire a 10% stake in Ennore foundries, now renamed Hinduja Foundries.

Hinduja's have decided to sell 10% of the their holding to raise $80-100 Mn. for partfinancing proposed capex.

The Sun Also Sets : PE deals falling through

2008-03-15T13:23:00.003+05:30

The chill is moving deeper down the spine. This HT article points out that southbound market is taking a lot of valuations and some of the deals with it. Down.

With 14 PE deals falling through in last 3 months & big 3 in last last month, Feb. PE deals are 55% lower then Jan'08.

The 3 big ones to go down are ICICI Venture-Jaypee Infratech deal, Rs 1200-crore Blackstone-Eenadu group deal and Rs 250-crore Future capital-DishTV deal. The Jaypee deal is shaved from 3200 to 1000 Cr.

PE funds closed over 27 deals in Feb. valued around $1.48 billion, according to a Grant Thornton study. India Inc recorded deals worth $5.06 billion in 116 M&A and PE deals in Jan.

Compared to Feb'07, there was a 50 % rise in PE deals this Feb.

Reality Major's REIT plans delayed

2008-03-14T18:32:00.004+05:30

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

2008-03-14T18:06:00.003+05:30

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

2008-03-14T17:35:00.004+05:30

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

2008-03-14T13:21:00.004+05:30

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

2008-03-14T11:10:00.003+05:30

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

2008-03-14T10:20:00.004+05:30

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

Funds Hunt For Land To Ride Commodity SuperCycle

2008-03-13T19:37:00.005+05:30

While Equity Markets globally have taken a tumble, commodities are riding on a SuperCycle. Global money is now chasing direct farmlands in search of alpha. Investment banks and hedge funds are mopping up vast tracts of agricultural land around the world, hoping to ride the so-called "commodities supercycle" that has lifted prices of everyday agricultural commodities such as wheat, rice, soybeans and corn to record highs.

U.S. investment bank Morgan Stanley has bought several thousand hectares of land in Ukraine, Europe's grain basin.Morgan Stanley declined to comment, but industry executives say many other big banks are looking at land. Barclays Capital, the investment bank arm of UK bank Barclays Plc, is actively searching.

Fund manager BlackRock has a hedge fund that invests in agricultural land. International estate agents Knight Frank is setting up one to buy agricultural land in the UK.

"Over the next five years, you will have 2 billion more people eating bread, eating noodles, drinking coffee ... There is no way in this world that the supply side can catch up with the demand side," says Badung Tariono, an Amsterdam-based fund manager for ABN AMRO.

Goldman enters commodities trading through Shriram

2008-03-13T14:28:00.003+05:30

We had mentioned Goldman's India Bet a couple of days back in a post here. The NBFC & commodities brokerage part of it they have implemented by picking a 20% stake in Chennai-based Shriram Credit (an NBFC) for Rs 300 crore, making an indirect entry into equity and commodity brokerage business in India. GS reserves the right to further hike it to 25%.
The Indian group is transferring its brokerage and distribution services business to Shriram Credit and bringing in Goldman Sachs as a significant minority partner. The deal values the firm at Rs 1,500 crore ($375 million). Goldman Sachs is routing the deal through its 100% Mauritius-based subsidiary GS Strategic Investments.
Foreign investment norms currently do not allow direct investment in a commodity brokerage firm. However, foreign companies can invest in a firm, which in turn owns a separate commodity brokerage entity. The funds would be used for expansion of its existing and proposed businesses of Shriram Credit.
Read the full article on Economic Times

Piramal to demerge R&D - to invite equity partner

2008-03-13T13:55:00.002+05:30

Nicholas Piramal India Ltd. will demerge its R&D into a separate company early in March. The partner, likely a pharma MNC with interest in drug discovery, will have at least 10% equity in the research unit, said a senior executive, preferring anonymity.

The research company, which will be known as Piramal Life Sciences Ltd, is valued at about $500 million (Rs2,025 crore) by financial and equity research firms such as Lehman Brothers, Enam Securities Pvt. Ltd and Kotak Securities Ltd.

The promoters will dilute around 10% in Piramal Life Sciences to the partner, “but it will happen only after the company gets listed on the stock exchanges, because we will have an absolute valuation only then”,said Nicholas Piramal chairman Ajay Piramal.

The new unit’s valuation is predominantly based on three new drugs under advanced development in the company’s discovery portfolio. Nicholas has one cancer drug that has almost cleared early-stage, or phase I, trials in Canada and some other international markets. It has two anti-inflammation molecules in advanced development stages.

For detailed intreview read Mint

L&T-GreatOffshore-Blackstone for ICICIVenture's Tebma Shipyard

2008-03-13T12:41:00.005+05:30

According to a ToI article, L&T, shipping company Great Offshore and private equity funds Blackstone, Abraaj Capital and Apax Partners are eyeing a stake in the south-based Tebma Shipyards.

Tebma Shipyards is India’s third largest private ship-building firm after ABG and Bharati Shipyard. Owned largely by ICICI Venture, Tebma, as part of expansion strategy, plans to build a facility in West Bengal.

The 150 acres Rs 500 crore project ($125 million) will be funded by Debt & . ICICI Venture has been approached by various players.Ship-building players earn operating margins of 20-25% helped by 30% export subsidy

The West Bengal shipyard will be Tebma’s third facility, in addition to its Chengalpattu (70km from Chennai) and Malpe in Karnataka. The company will issue fresh equity to the investor and accordingly, ICICI Venture’s stake in Tebma Shipyards will come down, market sources said. The new shareholder is likely to get upto 26% stake for $100 million in Tebma Shipyards. The Rs 400 crore Tebma has an order book position of $400 million.

Similar to publishing firm Infomedia and heat resistant cement products maker ACE Refractories, Tebma too has been a buyout deal by ICICI Venture. Last year, the private equity arm of ICICI Bank bought a 33% stake in Tebma Shipyards and increased its holding to 53% by acquiring additional shares through open offer. Several small investors hold the remaining shares in the company.

The second largest shareholder is Balan, founder of Tebma, who holds about 9% stake.

Two India Centric Funds from Baer Cap

2008-03-13T12:04:00.002+05:30

Dubai-headquartered Baer Capital Partners is planning to launch two India-dedicated hedge funds this year.

The two funds - Beacon India Opportunities Fund with a corpus of $400 million and the $100 million Beacon India Growth Fund - will invest in listed companies. Baer is in the process of securing the regulatory approval for foreign institutional investor (FII) licence.

Sub-Prime Benefits Indian MidCap Companies

2008-03-13T11:11:00.003+05:30

This Business Line article reports that Indian Midcap companies have a hit a good time in their Deal Intentions in the US. Reduced profitability, crunch for working capital requirement (this requires a second look though..) & distressed assets on the block are all adding up to increased acquisitions.

This cross sector trend has seen Bangalore-based Kavveri Telecom Products and Pradot Technologies Pvt Ltd, the Ahmedabad-based Azure Styx Infotech, the Hyderabad-based FXLabs Studios, the Indore-based Plethico Pharmaceuticals, the Aluva-based Kerala Ayurveda Ltd and the Vadodara-based Minal Jewels figure among the mid-cap firms that have bought out US companies post-November 2007.

According to Virtus Global Partners’ estimates, deal sizes of less than $25 million accounted for 76 per cent of the US-bound acquisitions by volume in 2007, followed by transactions in the $25 million-50 million range ( eight per cent). “Deal sizes in the $50 m-100 m, $100 m-500 m, and greater $500 m range each accounted for less than six per cent of the 2007 transactions,” an analyst said.

For a list of deals below $25 Mn. read the complete article on Business Line

Sovereign Wealth Funds Come Under Scanner

2008-03-10T14:42:00.004+05:30

India has joined the global debat on Sovereign Wealth Funds (SWFs).

As a first step, the finance ministry is going to come up with a common working definition of such funds and identify their Indian holdings, said a senior official in the ministry who did not want to be named.

The issue contested is motive. Profit versus Strategic motives for investing. Loose governance standards can mean an individual's money moves in & out of SWFs while state owned firms can acquire stake in rival firms/countries for strategic objectives.

SWFs have existed for about 50 years, but it is their recent growth in size that has triggered concerns. According to the International Monetary Fund (IMF), SWFs’ sizes are likely to grow threefold over the next five years to $6-10 trillion. The recent growth in SWFs is being driven by foreign exchange surpluses generated by some countries on account of historic highs in oil prices and trade surpluses.

Australia recently became the first developed country to officially articulate a set of principles to be applied to scrutinize SWF investments. IMF has been asked by to come with proposals for a voluntary set of best practices in management of SWFs. Some countries with SWFs such as Singapore, operating through Temasek Holdings and Government Investment Corp., are open to following an IMF code to prevent a political backlash, the economist said. It is China’s aims which have many countries worried, said the finance ministry official. China, for its part, has been reluctant to submit to governance practices pushed by external agencies.

For full article please follow Mint

Spanish BBVA to enter India through PSB JV

2008-03-10T13:30:00.007+05:30

Spanish financial services group BBVA SA has identified India as one of its key markets in Asia and plans to enter the country through a joint venture with a public sector bank (PSB).

The roadmap over next three-four years involves a mutual funds venture followed by projects in consumer finance, credit cards and later, life insurance.

BBVA’s Asia general manager Manuel Galatas said that BBVA plans to enter MF market through a JV with a PSU Bank. They are talking with two PSB. It is believed that the two PSBs are Bank of India & Corporation Bank.

Some time ago BBVA was in talks with Union Bank of India for a mutual funds joint venture, but it is now understood that the Union Bank has zeroed in on Belgium’s KBC Group NV as its partner for its mutual funds business.

BBVA with a market capitalization of €53 billion (Rs3.2 trillion) and more than 8,000 branches worldwide, is also open to acquisitions of mid-sized banks here, when the regulatory environment permits. The Spanish company entered India in April last year with a liaison office in Mumbai.

For full article read Mint

VC Funds: The Problem Of Plenty

2008-03-10T10:58:00.004+05:30

It's long been suspected, the problem of plenty. But now it seems real. India is flush with VC funds but not enough worthy enterpreneurs. This, according to Sramana Mitra at Forbes.

Saramana is an MIT educated Silicon Valley serial enterpreneur & strategy writer. In her commentary on Indian VC space at Forbes she makes following observations.

In 2007, 50 new VC firms were added taking the total to 500, ready to fund close to $1 Bn.

According to her, the tech. enterpreneur's natural instinct to build outsourcing companies is a by product of lack of understanding of how global technology markets work. Hence BPO, Software Services & Chip Design etc., each takes less capital & begins generating revenue shortly making VC capital redundant. It further has few entry barriers. However it's the only available model in Tech VC space & has returned money hence a common investment thesis.

That nearly $1 billion of venture money, however, has been seeking other opportunities. That's made consumer Internet and mobile offerings the next stopping point; India's growing mass of connected consumer population is the target wallet. Travel, matrimonials, jobs, games and mobile payments are all segments getting substantial capital infusion. The engineering or product marketing required in building these sites is marginal, brand marketing being the big differentiator--something the Indians know how to do.

But consumer Internet alone cannot exhaust the available capital, so those who understand the subtleties of these dynamics have started diversifying their portfolios with retail, real estate and hotels. In 2005, Oak Investment Partners announced a $200 million venture fund to focus on the retail boom in India. Veteran Retail investor Jerry Gallagher india visit & a look at revenue per sq. ft at malls & stores prompted him to convince his partners to commit capital to retail.

That apart, with "Product Driven" companies absent, large available funds & not enough avenues in the traditional space, VC funds are moving to areas, where competition already exists. Retail, Real Estate, Bio-Tech, Hospitality each has bigger players making VC presence unwelcome. Add to that increasing thrust from government in creating VC funds catering to SME (read previous post) and we are facing the problem of plenty.

SIDBI Finanancial Inclusion 2000 Cr. Package

2008-03-10T10:16:00.003+05:30

SIDBI will roll out new equity scheme for SME through Rs.2000 Cr. risk capital fund announced in budget.
Besides the funds allocated in the Budget, SIDBI will seek participation of private equity players and venture capitalists for injecting risk-bearing equity capital into small and medium enterprises (MSME), the bank's Deputy Managing Director Rakesh Rewari said.
This 2000 Cr. fund is in addition to another Rs.2000 Cr. fund set aside for refinancing to MSME.

"Equity financing is very low in the MSME sector. Of the total finance raised by small firms, only five per cent is contributed towards equity and the rest 95 per cent is in the form of debt," Additional Secretary in the MSME Ministry Jawahar Sircar said. The large industries, on the other hand, manage to meet 45 per cent of their fund requirement in the form of equity, he said.

Earlier this week, SIDBI Venture CEO A K Jaipur said at an MS ME seminar here that availability of equity capital can be increased by promoting more Angel Clubs in the country. "Angel clubs have limited presence in India. There are more than 2,500 in the US compared to only a handful in India," he had said.
Read the full article on Financial Express

Tata Motors CDS Inching Up on Risk Worries

2008-03-07T16:27:00.004+05:30

Credit-default swaps (CDS) on the Mumbai-based company rose 10 basis points to a record 503 basis points at 3:48 pm in Hong Kong, according to ABN Amro Holding prices. That means it costs $503,000 annually to protect $10 million of Tata Motors’ debt from default for five years.
Tata Motors’ five-year credit-default swaps have more than doubled and its share price fallen 12 per cent since Ford announced the automaker as the preferred bidder for Jaguar and Land Rover on January 3.

Tata Motors plans to raise the 15-month loan from nine banks led by Citigroup and JPMorgan Chase & Co, three people with direct knowledge of the deal said

It will pay less than 2 percentage points more than the London interbank offered rate (Libor) as interest and fees for the loan, the people said. About $2.5 billion will fund the cost of the acquisition and the rest will be used for working capital, the people said. Tata Motors is also talking to Bank of Tokyo Mitsubishi UFJ, BNP Paribas, Calyon, ING Groep, Mizuho Financial Group, Standard Chartered and State Bank of India to arrange the loan, according to the people who declined to be identified because the information was not public.

For more read the article on Business Standard / Bloomberg dated 07.03.2008

VC gets Pass Through Status in Budget

2008-03-07T13:04:00.001+05:30

From the Finance Minister’s Union budget speech:

“Venture capital funds are a useful source of risk capital, especially for start-up ventures in the knowledge-intensive sectors. Since such funds enjoy a pass-through status, it is necessary to limit the tax benefit to investments made in truly deserving sectors. Accordingly, I propose to grant pass-through status to venture capital funds only in respect of investments in venture capital undertakings in biotechnology; information technology relating to hardware and software development; nanotechnology; seed research and development; research and development of new chemical entities in the pharmaceutical sector; dairy industry; poultry industry; and production of bio-fuels. In order to promote business tourism, I also propose to allow this benefit to venture capital funds that invest in hotel-cum-convention centres of a certain description and size“

M&A Activity 2007

2008-03-07T09:38:00.003+05:30

Here's a merged graphic on last years Banker Activity. It sure has been a busy year.

CLICK TO ENLARGE. For more detailed reference click Business Line

The PE Pitch : A Different Ball Game

2008-03-07T08:44:00.007+05:30

PE investors, long known for their nimble profit seeking minds, have found yet another opportunity.

The Cricket Pitch.

Chennai Super Kings, the team owned by India Cements (ICL), has been approached by private equity investors. Admitted N Srinivasan, vice chairman and MD, India Cements: "A few private equity investors met me. They were interested in knowing if I would be willing to dilute my stake in the team's equity."

However N Srinivasan is banking on GBP 9 Bn. Manchester United valuation, with much smaller soccer audience compared to cricket, for a better deal.

According to I-Banking sources other IPL franchisee too may be willing to offload minority stake. The other names doing rounds include Deccan Chronicle (Hyderabad), Vijay Mallya (Bangalore), Ness Wadia and Preity Zinta (Mohali) and Shah Rukh Khan's Red Chillies Entertainment (Kolkata).

According to UTI Venture CEO K E C Rajakumar, Opportunistic PE Investors, Cricket win momentum, 4+ years of time to prove the concept and lower valuations in the nascent stage all point to this being a good deal now.

PE investors insist their interest in the cricket business is based on sound logic. Said one of them, "Let's get it straight. Mukesh Ambani, Vijay Mallya, GMR are businessmen who are not given to doing stupid things. Also, keep in mind that Anil Ambani and K V Kamath (of ICICI Bank) also wanted to enter this business."

Read it all on ToI

Goldman Sach's Long bet on India with AMC,NBFC, PE & Wealth Management

2008-03-06T17:31:00.006+05:30

After severing it's Kotak ties in 2006, Goldman Sachs is getting 30 year long on India according to GS India's MD & CEO L. Brooks Entwistle. “This is not an outpost. We are here building businesses with a view of the next 30 years.”

GS (India) team of 100 is readying a launch of AMC, followed by Primary Dealership, an NBFC to compete with GE Money & Citi Financial in loans business.

The $770Bn AUM leader is also preparing for Private Wealth Management & Commodities research. It already advises Oil Companies on hedging while it awaits regulatory clearances for Commodity trading.

On the PE front Goldman Sachs has begun chasing Blackstone & Temasek with investments close to $2 billion (Rs8,060 crore) in some 40 Indian firms including OnMobile Global Ltd (recent IPO, Sudhir Gensets Ltd, IRB Infrastructure Developers Ltd and Sigma Electric Manufacturing Corp., besides the NSE Ltd and NCDEX Ltd.

With its research team now closely tracking 75 Indian stocks, its sales force in London, New York, Singapore and Tokyo is aggressively selling Indian equities. L. Brooks Entwistle has appointed HK based Adam Broader as CFO to head the AMC and awaiting SEBI approvals. In the run-up to the AMC launch, GS is in the process of floating Goldman Sachs India Fund, an offshore fund, some time this month.

Read the full story on Mint

Angels to the rescue

2007-12-10T13:10:00.000+05:30

Heres an article in the Hindustan Times which talks about the irony in the PE/VC space in India. It says "While the country is awash with foreign money flowing into private equity, early stage funding, what many believe to be the essence of venture capital, is not quite abundant. But successful Indian entrepreneurs who have been there and done that are trying to solve this problem in their own way with a network of “angels” — individuals who provide seed capital and some hands-on advice and help to boot, often by sitting on the boards of start-ups."

We hope the band of angels is always on the increase. Read the complete article on HT online

IDFC PE to raise $600 million in third fund by March 2008

2007-12-10T13:00:00.000+05:30

IDFC Private Equity, the private equity investment arm of infrastructure financing firm Infrastructure Development Finance Co. Ltd (IDFC), is raising a $600 million (Rs2,364 crore) fund, its third since it set up operations as the country’s first pure play infrastructure PE investor in 2002. The proposed fund has an upper limit of $700 million on the final corpus and is expected to close fund-raising in March 2008 as reported by Mint.

Separately, IDFC PE’s parent, the state-owned IDFC is itself in the process of closing first-round commitments for a mega $5 billion mega infrastructure fund, which includes debt and equity. With the proposed $600 million fund, total funds raised by IDFC PE till date stand at $1.2 billion. Its first fund, India Development Fund, had a corpus of $192 million and was the first to raise capital entirely from domestic institutional investors. The second fund, dubbed, IDFC Private Equity Fund II, raised $440 million of which over 70% came from overseas investors.

The firm has invested in 22 companies till date, which includes three airports and 31 roads and bridges. It typically picks up stakes between 10% and 50% in each of its portfolio companies and invests across the spectrum in power, oil and gas, transportation, telecom, urban and rural infrastructure and social infrastructure

Nutek gets 25 cr funding from a US fund

2007-12-10T12:54:00.000+05:30

Gurgaon-based telecommunication solutions company, Nutek India Ltd, said that it was close to sealing a Rs 25-30-crore infusion from a leading US-based fund by end-this month. "We are in the final stages of closing this deal," Nutek India Managing Director Inder Sharma told reporters here.

The US-based fund will be picking up an around 10 per cent stake in Nutek, Sharma said, however without disclosing the identity of the US-based fund. The sale price is expected to be in the range of Rs 170 per share. Earlier, Atherstone Capital had invested Rs 10 crore in the company for an around 8 per cent stake. Atherstone Capital had been sold the company's shares at Rs 87 per share, Sharma said. This transaction took place nearly two years ago.

Post the fund-infusion expected to be completed by end-this month, the promoters' holding in the company would come down below 80 per cent from the present around 90 per cent, Sharma said.

Nutek's core expertise lies in the breadth of services it provides to its customers in the telecom infrastructure market. It provides turnkey infrastructure creation and installation for telecom sites which includes passive infrastructure like towers, telecom shelters, power plants, back-up power, DG sets, electrical infrastructure and earthing stations, among other services.

Source: Economic Times

3i makes its second India investment in Soma Enterprise

2007-12-10T12:41:00.000+05:30

3i India Infrastructure Fund, part of the London-based private equity and venture capital company 3i Group Plc, has invested $101 million (Rs 398 crore) in Hyderabad-based infrastructure company Soma Enterprise.

Though the companies have not disclosed the exact stake the fund picked up, Avinash Bhosale, joint managing director, Soma Enterprise said, “3i has got minority stake; the stake figure is in mid-teens (between 13% and 17%).” This figure values the company at over Rs 3,400 crore.

Soma will use the money for expansion. Hyderabad-based Rajendra Prasad Maganti and his family owns majority stake in the infrastructure firm. Pune-based flamboyant real estate developer and hotelier Avinash Bhosale is the other promoter.

Soma, with revenues of Rs 1,100 crore, has an order book of Rs 6,400 crore. The company is also planning a public issue next year.

The company has divided its business in six verticals. Theses include real estate, urban infrastructure, irrigation, transportation, tunnel and hydro power. Along with IL&FS, Soma is bidding for phase II of the Mumbai metro rail project.

3i India Infrastructure fund targets to invest about $1bn in the country. Soma Enterprise is its second investment in the country. In October this year, it had invested $227 million for a minority stake in Adani Power, a subsidiary of Adani Group.

Source: DNA Money

RE funds eyeing township projects

2007-12-10T11:39:00.000+05:30

Integrated townships seem to be the preferred investment option for private equity (PE) players in India. In fact, a Cushman and Wakefield (C&W) report finds that 28% of PE investors favour investment through this route in the real estate market.

Integrated townships — as a low risk investment avenue due to their diversification benefits and low entry cost — are a highly attractive option. Agrees Sandeep Singh, national head, capital markets, C&W, “In today’s high land price scenario, integrated townships offer higher value creation opportunities due to low entry costs for land and synergies created by mixed-use development within them.

Industry players also feel that it is only natural for investors to look at this asset class as a lucrative option. “Only integrated townships have the capacity to absorb a significant amount of capital that is raised ...this also means that in the years to come, this asset class is bound to grow by leaps and bounds,” feels V Hari Krishna, CIO, Kotak Real Estate Fund. Moreover, a mix of various services in these townships such as hospitals, recreation, education etc makes them win an edge over the other models.

The report also finds that investments in the market have spread rather evenly over three broad investment vehicles. While majority of the investment still remains either at the portfolio and SPV level partnership, at 40% and 36% respectively, the number of entity level partnerships formed 26% of the total investment in the sector.

Source: Economic Times

UBS India Investment Banking is stepping on the gas

2007-12-10T11:27:00.000+05:30

UBS will nearly double its investment banking staff in India to up to 180 (from 100 now) in the next year as it prepares to offer more services and retain its share of the increasingly competitive business, the head of UBS in India said.

UBS tops the merger and advisory table so far this year, up from seventh spot last year, data from Thomson Financial showed, leapfrogging rivals including Morgan Stanley , Citigroup , JPMorgan and Merrill Lynch.

Our challenge and our desire is to remain among the top three investment banks in India," Manisha Girotra, managing director and chairperson for UBS India, told the Reuters India Investment Summit on Thursday. The competition extended to staffing. Hiring and retention of talent were the biggest challenges, Girotra said, and took up 30-40 percent of her time.

UBS, the world's largest wealth manager, is also awaiting regulatory approval to offer additional services including fixed income, wealth management and high-end retail banking in India.
Globally, UBS has had a turbulent year. It closed Dillon Read Capital Management in May and in October announced its first group quarterly loss in five years. But it has said its wealth management business was poised for strong growth.

Source: Reuters

Its raining M&A's

2007-12-10T11:13:00.000+05:30

The volume of overseas mergers and acquisitions (M&As) by India Inc has grown phenomenally in the first half of the current fiscal and is likely to reach further heights over the next one year.
In the fiscal year 2006, the outbound M&As from India had an aggregate value of $13.97 billion spread over 480 deals. However, the M&As in the first half of the current fiscal surpassed this figure and stood at $25.58 billion, according to the data available with KPMG.

“The average ticket size of these outbound M&A deals from India had also been growing from $25 million in 2005 to $39 million in 2006,” Mr Preet Mohan Singh, Director (Corporate Finance), KPMG India Pvt Ltd

The key drivers behind this growth are increasing global consolidation, cost of production and valuation arbitrage, customs/skill set acquisition.

Source: Business Line

400 PE, M&A deals under CBDT scanner

2007-12-10T11:09:00.000+05:30

The spill-over effect of Vodafone’s battle with Indian tax authorities may prove costly for several other deal makers. The Central Board of Direct Taxes (CBDT) has reopened about 400 cases of big and mid-sized transactions that took place during the past six to seven years.

According to sources close to the development, the cases include foreign corporates and PE firms selling stakes of companies based in India, and not paying any capital gains tax. One of the first such cases that the tax department is currently probing is Montreal-based Alcan Inc’s selling of the controlling stake in Indian Aluminium Company (Indal) to Hindalco Industries seven years ago, sources in the finance ministry told SundayET.

Significantly, there were around 300 PE deals clocked in India in 2006 alone. The tax department had earlier slapped a notice on Vodafone Essar, demanding $2 billion as capital gains tax over its $1-billion acquisition of a majority stake in Hutchison Essar, India’s fourth largest mobile telephone company. The case is now locked in the Bombay High Court.

Source: Economic Times

Bharti, Idea and Vodafone Essar come together to form a tower company

2007-12-10T10:56:00.000+05:30

GSM mobile operators Vodafone, Bharti and Idea Cellular will jointly set up an independent tower company, Indus Towers, to share passive infrastructure with all telecom players to enable lower cost and a more competitive operating environment .

Bharti and Vodafone will own 42 per cent stake each in the tower company, with Idea will hold the balance 16 per cent. Indus Towers will be an independently managed and operated company.

The mobile phone companies will merge their existing assets, and the new infrastructure company will have 70,000 sites, which will be shared in 16 circles. In addition to telecom companies, service providers such as broadcasters and broadband service providers would also share the infrastructure, Vodafone said in a statement.

"Indus Towers will enable optimisation of future tower rollout and enhanced operational efficiency leading to operational expenses and capital expenses savings for its customers," it said in the statement.

Source: domain - b

General Atlantic takes minority stake in IBS software for $60 mn

2007-07-25T18:50:00.000+05:30

Private equity firm General Atlantic has paid $60 million for a minority stake in India's IBS Software Services, reported Reuters.

IBS, which provides services for the travel, transport and logistics industries, has two development centres in India.

Edelweiss Capital was the financial adviser to IBS.

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TechTribe gets funding from 3 PE funds including Canaan Partners

2007-07-25T16:15:00.000+05:30

Canaan Partners, a $2.4 billion global venture capital firm, today announced it has led a joint investment with The Entrepreneur's Funds and Miven Venture Partners in techTribe, India's leading career networking portal as reported by PRWeb.

techTribe is a software company that enables current and future Indian technology professionals to enhance their careers through social networking. The investment will be used to expand techTribe's sales and marketing infrastructure in India and to drive new revenue growth. Alok Mittal, Canaan's managing director in India, will be named to the techTribe board of directors.

The Indian career networking market for middle- and senior-level executives is worth $400 million, according to techTribe, which has operations in San Francisco and New Delhi.

Canaan Partners is a leading global venture capital firm specializing in early-stage information technology and life sciences investments. Founded in 1987, Canaan Partners has $2.4 billion capital under management and has invested in more than 240 companies, completed 63 mergers and acquisitions, and brought over 50 companies public.

The Entrepreneurs' Fund III (TEF3) is a Silicon Valley based, early stage venture fund focused on Software and Healthcare startups. Miven Venture Partners, founded in 2005, is a multi-stage venture capital firm with a primary focus on investing in consumer related technology companies.

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Angel Broking is attracting PE interest

2007-07-24T16:24:00.000+05:30

The domestic equity broking scene has been heating up recently. With the interest that global investors are showing in the Indian markets, the broking business is getting very attractive for a lot of players.

After names like Motilal Oswal, Edelweiss, India Infoline, it is now Angel Broking which is in talks to offer 20% of its stake to PE investors like Lehman Brothers, Warbug Pincus and the Carlyle group. Angel intends to raise Rs.200 crs through this sale, valuing it at Rs.1000 crs. NM Rothschild has been given the mandate to look for a suitable partner and the deal is expected to be closed by September end as reported by the Economic Times.

The funds will be used to finance Angel’s proposed expansion of branches and to launch new products such as loan against shares and margin funding, said the paper.

Praful Patel brings in industry friendly norms for aviation sector

2007-06-20T18:27:00.000+05:30

The aviation industry has seen a lot of action in the recent past on the M&A front. In line with the trends, Praful Patel the civil aviation minister has decided to support mergers & acquisitions (M&As) in the sector with industry-friendly norms, reported Times Now.

Simple rules for the transfer of traffic rights and the right to use airport infrastructure to facilitate M&As in the sector are among the initiatives proposed in the comprehensive civil aviation policy, which will be considered by a group of ministers (GoM) soon.

The civil aviation ministry’s stand should help M&A deals by making it clear that an airline which takes over another can use the traffic rights of the latter. Parking bays, landing slots, hangars, check-in stands, lounge areas, ticketing areas and office space would also get transferred.

In the aviation sector, management change makes it mandatory for airlines to get several clearances all over again from various authorities including the civil aviation ministry, the Director General of Civil Aviation, Airports Authority of India, the home ministry and the corporate affairs ministry, which could change if the new policy is approved by the GoM.

Max India raises Rs.1000 crs through QIP placement

2007-06-20T17:45:00.000+05:30

Max India today announced that it has raised Rs. 1,000 crore through a QIP, which was subscribed 2.3 times by broad based investors, spread globally. CLSA acted as the sole book runner and global coordinator for the issue.

The QIP raises FII holding in the company to 39% from around 26% earlier. Max India has an investment limit of 49% for FIIs.

The company has issued shares at a price of Rs. 240/- per share. Each share of Max India has a face value of Rs. 2/- and therefore, the new shares have been issued at a premium of Rs. 238/- per share. The new shares aggregate 18.8% of the fully diluted equity base of the company. About 40 % of the allocation went to US based investors while the remainder was split evenly between Asia and Europe based investors.

Max India plans to use the net proceeds from this issue to meet its additional funding requirements in line with its strategic business plans to further grow each of its existing businesses. A portion of the proceeds is also expected to be used for general corporate purposes including acquisitions and investments in new ventures. Encouraged by an almost 100% CAGR of its life insurance business since inception, the company has committed itself to growth plans for this business.

Source: Business Wire

CLSA Capital Partners invests in Luminous Power Technologies

2007-06-19T17:49:00.000+05:30

CLSA Capital Partners, a member of France's Crédit Agricole Group, announced that CLSA ARIA Investment Partners III LP and CLSA Clean Resources Asia have co-invested US$20.3 million in Luminous Power Technologies Ltd.

This is the seventh investment by Aria Investment Partners in India. Managing Director of LPT Rakesh Malhotra said, “This investment by CLSA will provide a strong impetus to our future growth in India and markets across Asia, Africa and Latin America. With this investment we will also be able to execute our strategy of offering high technology Power Electronics and Energy Storage products for the renewable energy sector.”

Luminous Power Technologies is a manufacturer of Inverters, UPS, Deep Cycle and Automotive Batteries and a range of water purification and other home appliances.CLSA Capital Partners is the alternative asset management arm of CLSA Asia-Pacific Markets, with US$1.5 billion under management.

Source: RTT News
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Ruias funding Algoma acquisition through senior notes & loans

2007-06-19T16:09:00.000+05:30

Essar Global will raise $900 million through a combination of senior notes and loans to fund its acquisition of Canada’s Algoma Steel, reported Economic Times. The non-recourse fund raising exercise by Essar Global is the second-largest such transaction by an Indian steel company, after Tata Steel’s almost $7 billion loan to finance its acquisition of Corus.

The Ruias’ international holding company had acquired Algoma in April for $1.58 billion in an all-cash leveraged buyout. Essar Global’s acquisition is considered the second biggest by an Indian company in North America, after Hindalco paid $6 billion to buy Atlanta-based Novelis in February.

To finance its Algoma acquisition, Essar Global will sell $450 million of senior notes, recoursed to the Canadian company’s balance sheet. The eight-year notes, denominated in dollars, may yield 9.75% to 10%. UBS is the financial advisor to the offer.

Essar Global also plans to issue $450 million in loans, based on Algoma’s earnings. The group’s own contribution will be about $500 million. It could not be ascertained how the rest of the acquisition amount — about $100 million — will be raised.

India Hospitality to buy Mars Restaurants, SkyGourmet Catering for US$110 mn

2007-06-19T15:19:00.000+05:30

India Hospitality Corp (IHC) said it wants to create a diversified hospitality company after agreeing to buy India-based Mars Restaurants Private and airline catering company SkyGourmet Catering Private for about 110 mln usd, as reported by Business Wire.

IHC said in a statement that it will pay about 91.6 mln usd in cash and the rest in shares on completion of the transaction. An additional amount may be payable if the businesses hit certain performance targets.

Upon completion of the transaction, current India Hospitality shareholders will own approximately 88.9% of IHC and insiders, including Hayground Cove Asset Management and Navis Capital Partners, will hold approximately 51.1%. Affiliates of Navis Capital Partners and Mr. Sanjay Narang, the founder of both SkyGourmet and Mars, will continue to play an active role in the management of the combined businesses going forward.

One of the major shareholders in the target companies, private equity investor Navis Capital Partners, retains an option to reinvest a substantial portion of the sale proceeds into IHC, the company said. The option allows Navis and its affiliates to subscribe for up to 75 mln usd in cash for new IHC shares, which, if exercised will lift Navis' stake in IHC to about 20.7 pct.

Citigroup keen to divest 80% of its BPO arm

2007-06-19T14:51:00.001+05:30

On the heels of Blackstone's acquisition of the back-office firm Intelenet, news is ripe that Citigroup is keen on selling 80 percent of its business process outsourcing (BPO) arm in India for USD 700-USD 750 million, reported the Mint .

Citigroup is in "advanced negotiations" with leading private equity firms for an all-cash deal for Citigroup Global Services, the newspaper said, citing investment bankers close to the deal. A private equity investor was most likely to emerge as the buyer with IBM Corp. and Tata Consultancy Services Ltd. "likely to drop out of the race over terms being proposed by the seller", the bankers told Mint.

Citigroup Global Services operates primarily in financial services and employs about 8,000 people, its Web site showed.

Private firms are eager to invest in back-office firms in India because of the potential for fast growth in the sector. Carlyle, which has a 28 percent holding in Allsec Technologies Ltd., is reportedly bidding for another back-office firm, Cambridge Solutions Ltd.

Intelenet: Blackstones first management buyout in India

2007-06-19T13:25:00.000+05:30

Private equity heavyweight Blackstone Group agreed to buy Indian back-office firm Intelenet Global Services Ltd. for an undisclosed sum, its first management buyout in India, reported Business Standard.

U.S.-based Blackstone, which along with rival Carlyle has been grappling with stiff resistance from Indian companies unwilling to sell out, will own 80 percent of Intelenet, with the back office firm's management holding the remainder.

Under the deal, a joint venture comprising HDFC Bank and Barclays Bank will sell its Intelenet stake to SKR Business Process Outsourcing Services, a company co-owned by Blackstone GVP Capital and Intelenet’s management. Although financial terms of the deal were not disclosed, industry Business Standard sources pegged the sale figure at around $420 million.

Intelenet’s management team will continue to be in charge of operations, with current Chief Executive Susir Kumar at the helm. Also, Intelenet will continue to provide services to Barclays in relation to certain processes currently offshored to India.

Intelenet started out in 1994 as a 50:50 joint venture between Tata Consultancy Services (TCS) and HDFC. In 2004, TCS sold its stake to HDFC for Rs 161 crore when it decided to focus on its own business process outsourcing (BPO) business. Subsequently, HDFC sold 50% to the UK-based Barclays, which was looking to outsource back-office processes to India.

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Merill Lynch loses Sumeet Puri

2007-06-18T19:08:00.000+05:30

Sumeet Puri resigned as head of equity capital markets in India at Merrill Lynch & Co., the biggest arranger of share sales in the nation, reported the Economic Times. Puri will leave Merrill by August after 13 years with the New York-based investment bank.

There have been no official statements as of now on this development from Merill Lynch and the reason for quitting, less than five months after he was named to run equities and origination of structured products in India, is not known yet.

Merrill's top executive in India, Amit Chandra, and its head of investment banking Munesh Khanna quit at the end of last year to start buyout funds.

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Merill invests US$ 11 mn in India's Copal Partners

2007-06-18T17:55:00.000+05:30

Merrill Lynch completed a minority investment in KPO provider Copal Partners, joining Citigroup and Deutsche Bank as minority investors in the firm, reported . The three banks now collectively own around 25% of the business.

Based in the UK, Copal Partners is a leading KPO with approximately 550 employees based primarily in India and Mauritius. Copal is a leading outsourced research provider to Wall Street firms and the buy-side. The funding will be used for expansion organically and through acquisitions

According the WSJ, Copal is valued around $300 million, putting Merrill’s stake around 3.7%. The investment is a strategic one, in the sense that Merrill, like the other minority investors, relies heavily on outsourcing for its own research and other activities such as investment banking prep work.

Citigroup Venture Capital to invest a fresh $1.5 bn in India

2007-06-18T16:14:00.001+05:30

Citigroup Venture Capital International (CVCI), Citi’s emerging markets private equity investment arm, will invest a fresh $1.5 billion in India over the next three years, reported the Mint. It will be the largest such infusion by a single private equity investor in the Indian market and outstrips the $1 billion allocations made by the Blackstone Group and Carlyle Group each in 2005.

The investments will be made out of CVCI’s global $4.5 billion Growth Partnership LP Fund II, which is slated to complete fund-raising in a few weeks. In three years, CVCI’s exposure to India will jump three-fold from the $500 million it has invested here so far.

The move to up the ante in India follows the recent reorganization of Citi’s global alternative assets businesses, namely hedge funds, private equity and real estate development, under Citi Alternative Investments (CAI), led by former Morgan Stanley executive Vikram Pandit.

CVCI stepped up its investments in India in 2005 soon after the launch of its $1.7 billion Growth Partnership LP Fund I. This fund, incidentally, was the first independent PE fund that CVCI raised since it started operations as a private equity investor in 1996. The bulk of the $500 million it has invested in India so far came from Fund I. Investments prior to 2005 were made mostly out of proprietary funds from Citi.

Among its notable investments pre-2005 were I-Flex Solutions Ltd in Mumbai, Progeon Ltd (now known as Infosys BPO) in Bangalore and Polaris Software Lab Ltd in Chennai.From the new fund, it will go after deals in cross-border outsourcing, consumer-driven industries, infrastructure and restructuring plays among others.

Barings is launching its third India dedicated fund

2007-06-18T16:14:00.000+05:30

Baring Private Equity Partners India Ltd plans to launch its third India fund in the second half of 2007, with a corpus of at least $175 million (Rs717.5 crore) to target the energy and the knowledge process outsourcing (KPO) sectors, reported the Mint. The focus will be on alternative energy projects as they have a small gestation period and are comparatively smaller as compared to the conventional power projects.

Baring Private Equity Partners was founded in 1984 and has operations in Latin America, Europe, Russia, Asia and India. The company already has two funds operating in India with interests across sectors such as information technology, life sciences, financial services, energy and fast moving consumer goods.

Baring’s Indian operations started in 1997 with a $40 million fund and its second India fund of $175 million. Its two funds have invested in companies such as Mphasis BFL Software Ltd and Integra among others.

Yash Raj attracts PE interest

2007-06-18T15:30:00.000+05:30

Yash Raj Films (YRF) is planning to enter the TV content and broadcast business and is in talks with private equity funds to raise money. A separate company may be created for the TV business.

YRF founder-promoter Yash Chopra has had talks with private equity investor Blackstone, the source adds. Among the other new initiatives, YRF is planning to get into the film exhibition business.

When queried about the TV business, Yash Raj Films chief executive Sanjeev Kohli said: "We are considering an entry into the TV space. We will be firming up our plans in the next few months." He did not rule out a presence in the broadcasting arena, but said no definite plans had been worked out yet.

Source: Indiantelevision.com
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Ascendas launches S$500m development fund for India

2007-06-18T15:21:00.001+05:30

Business space provider Ascendas has launched its first ever development fund for India - to tap into the country's booming real estate sector. Totalling S$500 million, the private fund will invest in the development of integrated property projects like business and IT parks.

The new Ascendas India Development Trust will start by developing two IT business parks, in the Indian cities of Pune and Nagpur. Ascendas had announced in April that it was developing the two projects through joint ventures with Indian government agencies.

It plans to raise the total asset size of the fund to S$1 billion - and is in the process of securing new investment projects. Current investors in the fund include Bahrain-based asset manager Arcapita, and Holland's ING Private Banking

Source: Channel NewsAsia
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Vineet Vohra to head ING India operations

2007-06-18T15:06:00.000+05:30

ING Groep NV's (ING) investment management unit said Wednesday it appointed Vineet Vohra as chief executive of its India operations.

He will take over from Kavita Hurry, who has been chief executive since 2002 but is leaving ING to pursue other interests.

Vohra comes to ING from Citibank N.A., where he helped build the firm's wealth management franchise as regional director and business head for Citibank's Asia Pacific Consumer Investments business.

Vulture Funds investing in SMEs

2007-06-18T14:33:00.000+05:30

There was an interesting article in the Economic Times on June 13, on how distressed assets funds (also called as Vulture funds) have been attracted to the SME segment in India. Over the past six months, funds specialising in distress assets like ADM, Clearwater, Citadel, Goldman Sachs Special Situations and DE Shaw have invested in such companies.

Spinnaker has invested in Spice Telecom and Clearwater in Sanghi Movers and earlier Diamond Cables. While Asia Debt Management (ADM) has invested in Rama Pulp and Paper, DE Shaw has invested Amar Ujala, Citadel in Aban Lloyd and Goldman Sachs has put in money in Cremica.

Both the SMEs as well as distress funds have their own motives to embrace each other. The SMEs may get funds for working capital from the banks, expansion capital is much more difficult. From a distress funds perspective, there are not enough distress opportunities considering the economy is growing at around 9%. Hence funds are forced to look outside their focus area

Read full article

NEA-IndoUS Ventures Fund invests in ISGN Technologies

2007-06-18T14:14:00.000+05:30

ISGN Technologies Ltd, a software services firm servicing US funding from mortgage customers, has received $25 million (Rs102.5 crore) venture capital firm New Enterprise Associates (NEA) and an affiliate NEA-IndoUS Ventures Fund, a firm controlled by Vinod Dham, a former engineer who was part of the Intel team that designed the first Pentium chip.

The NEA firms declined to disclose financial terms but said they will pick up equity between 10% and 30% at ISGN. ISGN will use the investment to set up new offices and finance sales and marketing. The revenues of ISGN, backed by India’s K.K. Birla group of companies, as on March 2007 were $30 million. K.K. Birla is the chairman of HT Media Ltd

Firms from the outsourcing industry have attracted significant Private equity interest. Early this year, Adventity, a back office firm specialising in financial services, announced its first round of funding of $20 million from an investment to fund its domestic and oversees group led by Norwest Venture Partners expansion plans.

New Delhi-based Global Vantedge, that had carved a niche in the insurance recovery industry got strategic funding of around $8 million from private equity firm ChrysCapital in 2002, and was acquired by an Essar group call centre company in February 2007.

Indecomm Global Services Ltd, which provides financial services to its clients, received $5 million funding from West Bridge Capital Partners and Acer Venture Capital in 2003.

Source: Mint

Lehman completes a Trimurti of senior hires

2007-06-14T17:55:00.000+05:30

Lehman Brothers has made the last in a trimurti of senior hires to its Indian investment banking unit with the appointment of a venture capital specialist Jayanta Banerjee to run its private equity business in the country, as reported by Reuters.

Jayanta Banerjee joins from ICICI Ventures where he was a committee member on India’s largest private equity fund, the $810m India Advantage Fund Series 2.

By hiring Banerjee, Lehman has appointed new heads for its three main growth businesses in India this year. In January the bank hired Surojit Shome as head of investment banking before appointing Pankaj Vaish as head of equities and fixed income markets in April. Both were earlier working with Citigroup.

Banerjee will report to Tarun Jotwani, the chief executive of Lehman’s business in India, and Christopher Manning, head of the bank’s Asia investment management division.

Reliance Cap bitten by the Investment Banking bug

2007-06-14T17:28:00.000+05:30

The growth in the Indian Investment Banking field continues to lure more players .

Reliance Capital, having a presence in asset management, retail broking and insurance businesses in the country, now intends to start an investment bank in partnership with a foreign player, reported the Economic Times. Reliance Capital’s vice-chairman Amitabh Jhunjhunwala is said to be overseeing the initiative.

Bear Sterns and Paine Webber are some of the names floating around who could partner Relaince Capital in this venture.

Investment bankers from rival firms believe Reliance Capital can have a significant presence in the investment banking business, given the fact that it holds minority stakes in various companies across sectors, which could lead to securing fund-raising mandates of these companies.

Mickey Mouse meets loverboy Raj

2007-06-14T16:19:00.000+05:30

Walt Disney is typing up with the production house of Bollywood showman Yash Chopra (Yashraj Films) to co-produce animated films in Bollywood, as reported by Economic Times.

While the deal is not a joint venture with equity participation, the industry perceives it as the beginning of a relationship that may later culminate in a strategic equity partnership. For Walt Disney, the Indian game plan could be to secure a supply chain so as to make inroads into the local market. Joining hands with an established house would make greater sense in high growth markets.

Amid reports of Yashraj’s tie-up with Disney, rumours are also floating that some private equity players have evinced interest in investing in the production house.

ICICI Ventures buys stake in Radiant Research

2007-06-14T16:03:00.000+05:30

ICICI Venture has acquired majority control in US-based clinical research company Radiant Research for an undisclosed amount, as reported by Economic Times.

Last year Radiant Research had sold a part of its clinical research business, constituting eight clinical pharmacology centres, to US-based clinical research company Covance for $65 million. With 26 other clinical centres, the current deal could have been valued at $150 million plus.

Apart from clinical centres, Radiant compromises of a full service CRO and a centralised patient recruitment company, employing over 400 clinical research professionals. Radiant Research had clocked revenues of $73.5 million in 2003.

ICICI Venture has multiple exposure in the life sciences business. Its investment portfolio includes Arch Pharmalabs, Malladi Drugs, Bharat Biotech, I-Ven Pharma, RFCL, Metropolis, Perlecan, Avesthagen, Biocon, Medicorp and Intas Pharma.

Mayfield Fund is building its team in India

2007-06-12T12:11:00.000+05:30

Mayfield Fund, which has $2.6 billion under management with investments in high growth companies in the U.S., China and India, announced the addition of Nikhil Khattau and Vikram Godse to its India investment team based in Mumbai, as reported by Finance Asia.

This follows the fund's two direct investments in the past six months in India in Tejas Networks and the Seed Fund. Mayfield's activities in India are being led by the U.S.-based Managing Directors Navin Chaddha and Robin Vasan.

Khattau was earlier the founding chief executive of Sun F&C Asset Management, one of India's first private-sector asset managers, which is now part of the Principal Financial Group.

Godse was a founder of JM Financial Investment Managers, an Indian private equity fund. Before that he worked in India for the investment unit of Cisco and for Infinity Venture Capital, one of India's first venture capital firms.

Mayfield will focus on investments in the consumer services (retail, entertainment and travel), infrastructure (power, roads, buildings and waste disposal), manufacturing and offshore sectors in the country.

Apax to buy Patni stake for USD 800 mn

2007-06-06T12:17:00.000+05:30

Apax Partners, a UK-based private equity firm, is planning to buy a controlling stake in Mumbai-based Patni Computer Systems for over USD 800 million, reports Economic Times. Apax is willing to pay 8-10% higher over the present share price, for 44% stake in the company.

Two other mid tier Indian IT companies and other private equity firms are also in the race to acquire stake in the company.

The move was stimulated by Gajendra and Ashok Patni (co-founders of the company), who expressed their will to exit from the company. They together hold 28% stake in the company. General Atlantic, another private equity firm is also considering to sell 16% stake. Narendra Patni (co-founder) will continue to hold a 16% stake in the company.

RSM Equico on the prowl for acquirers

2007-05-25T15:00:00.000+05:30

RSM Equico, an investment banking arm of US-based H&R Block, a $7 billion, Fortune 500 financial services company, is seeking local participants to join its “buyers’ pool”. A buyers pool refers to the collection of potential acquirers.

Hector J Cuellar, president, RSM Equico, is now making pitches to five dozen local industrialists in five days in a bid to enlist them into the buyers pool for close to 200 mergers & acquisition proposals from US medium-sized companies they have in the pipeline.

So far, RSM Equico has never had an Indian in its buyers pool till one of its accounting and consulting units operating in India informed that Batlilboi Ltd, the machine-tool maker and engineering services firm, was on the lookout. RSM Equico steered Batliboi’s acquisition of Quickmill Inc, a Canadian CNC lathe machine maker, for Rs 22 crore on March 27.

Source: DNA Money

IFC to invest US $500 million in India by June

2007-05-25T13:19:00.000+05:30

World Bank's private equity arm, International Finance Corporation, aims to cross 500-million-dollar mark in new investments by June 07. IFC's currently-held portfolio is 1.3 billion dollar (as of June 2006) making India its fourth-largest country of operations.

During the last year, IFC invested over Rs 91.71 crore in a subsidiary of Moser Baer and infused about Rs 82 crore for assisting Kanoria Chemicals in its expansion plan. It has also picked up 11.48 percent stake in Granules India for around Rs 26 crore and has committed a 50-million- dollar loan to Orissa-based cement manufacturer OCL India Ltd. IFC would also invest over Rs 101.37 crore (25 million dollars) to help expansion of the production capacity of electronic bikes marker Electrotherm India in Gujarat.

IFC focuses on supporting companies that do not have easy access to long term funding. In the past, IFC had invested in companies such as Bharat Forge and Titan Watches, which later grew into global brands, in their early stages. The list also includes industrial giants like Tata Steel, Larsen and Toubro, Bajaj Scooters and Arvind Mills. In the financial sector, IFC played an institution- building role and was a founding investor in key financial institutions such as HDFC and IDFC and continues to be their partner.

As of financial year 2006, IFC has the largest exposure in the manufacturing sector, followed by financial sector. Pulp and paper, steel products and chemicals formed a large part of the manufacturing portfolio of the institution.

Source: Hindustan Times
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Central Bank plan to tap the Capital Markets:plans an IPO of 1000 cr.

2007-05-24T19:34:00.000+05:30

Central Bank of India, one of the few government-controlled banks yet to tap the capital market, has filed its draft prospectus for an initial public offering with the capital markets regulator Sebi to raise close to Rs 1,000 crore.
The bank, which is planning to launch a public offering of eight crore shares, is likely to price its issue at close to Rs 110 per share. Central Bank, like other banks in the country, needs funds to bolster its capital base to feed rising demand in an economy which has recorded an average growth of 8% during the last four years.
The public offer will help the bank bolster its capital adequacy ratio now at 10.4%. The beefing up of its capital base will also aid the bank in fulfiling regulatory norms for banks with overseas operations.

Source: Economic Times

ITC Hotels acquire 100 % stake in King maker Marketing Inc. (KMM)

2007-05-24T19:27:00.000+05:30

ITC Ltd on Thursday said it has acquired the balance 49.02 per cent shareholding of King Maker Marketing Inc (KMM) for an undisclosed amount. After the said acquisition, KMM has become a wholly-owned subsidiary of ITC with effect from May 9, ITC said in a communique to the Bombay Stock Exchange. Earlier on November 6, ITC had consolidated its stake to 50.98 per cent, after which KMM became a subsidiary company of ITC. KMM is engaged in the business of distribution of tobacco products and all its brands are made exclusively by ITC.

Jain Irrigation to acquire an Israeli co.

2007-05-24T18:50:00.000+05:30

The Indian agriculture conglomerate Jain Irrigation Systems is buying 50% of Israel's Na'an Dan Irrigation at a company valuation of NIS 140 million.

Sources in Israel's agriculture sector say that Na'an Dan preferred the Indian offer, even though Israeli company Netafim's offer was more attractive in many respects. The reason for rejection is believed to be that Netafim demanded a controlling share in the company, raising concerns that Netafim would take steps to integrate the management activities of the two companies, sending Na'an Dan's management home.

Source: Haaretz.com
Related News: Jain Irrigation to acquire US-based Aquarius Brands for $21.5 mn

Restrictions on Realty VCs

2007-05-24T16:58:00.000+05:30

The real estate sector has been on the radar of regulators for a while now. The fear of an asset bubble being formed due to increased interest in the sector, especially by the ever growing realty funds, has been sensed by one and all.

As per an article in the Business Standard, the government is reviewing norms for investments by foreign venture capital funds in real estate, after the Reserve Bank of India coming round to the view that such funding is helping create an asset bubble in the sector.

The government had recently clamped down on the use of external commercial borrowing by real estate companies in order to check capital inflow, which, it feels, is fuelling inflation in the country.

With stock market sentiments too turning against the sector, real estate developers were looking at private equity funds as their last hope. But that source too could suffer if the proposed clampdown on venture capital funds takes place.

Under current norms, foreign venture capitalists invest in real estate through private equity firms in the form of foreign direct investment.

While market regulator Securities & Exchange Board of India has cleared the decks for registration of such VCs, the Reserve Bank of India has opposed their operation and not allowed them to open foreign exchange accounts. If the Reserve Bank gives the green signal, such investments will be clubbed under institutional investments.

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Whats up at Old Lane?

2007-05-24T16:32:00.000+05:30

Old Lane is a New York based Hedge Fund with a $500 million India fund. The firm was set up by former Morgan Stanley executives Vikram Pandit, John Havens and Guru Ramakrishnan.

13 months into existence, Old Lane was bought by Citigroup for a reported sum of $800 million. Pandit now heads Citi’s alternative investment business, while Ramkarishnan, a co-founder, has taken over as the CEO. By next month around 40% of the India fund will be invested

Read more about Old Lane, its investments and its plans in the Mint