Jet is planning a mammoth rights issue worth $400 million, the offer is still in its gestation period, and the issue is expected to come through in another 4-5 months according to director Mr. Vic Dungca.
$50 million from the proceeds would be used for Jetlite,the renamed Air Sahara which the company acquired after a prolonged legal tussle.The rest,according to the management, would be used to expand its existing fleet to 22 new aircrafts which would include 10 Airbus 330 and 10 Boeing 777.
Read the full article here
Monday, May 14, 2007
Fund houses on a NFO rolling spree
The mutual fund industry is set for a roller coaster ride.Investment banks like JP Morgan and AIG are coming out with NFO's for the first time.Along with them NFO's from veterans like SBI and HDFC is expected to hit the markets soon.
Capital protection offers are also rolled out by Franklin Templeton and DWS.DSP Merill Lynch's closed ended scheme is another fund which is closing for subscription at the end of the month.
Fixed maturity plans are in the pipeline by the likes of ICICI Prudential,Standard Chartered and Lotus.The offer documents of these funds have been filed with the SEBI.On the equity side UTI India Lifestyle, UTI Flexi Cap and Lotus Nifty Index Plus Fund are ready to make their offers public.
Read the Hindu article:
Fund houses line up series of new offers
Capital protection offers are also rolled out by Franklin Templeton and DWS.DSP Merill Lynch's closed ended scheme is another fund which is closing for subscription at the end of the month.
Fixed maturity plans are in the pipeline by the likes of ICICI Prudential,Standard Chartered and Lotus.The offer documents of these funds have been filed with the SEBI.On the equity side UTI India Lifestyle, UTI Flexi Cap and Lotus Nifty Index Plus Fund are ready to make their offers public.
Read the Hindu article:
Fund houses line up series of new offers
Sunday, May 13, 2007
Hedge funds to debut in India soon
The RBI monetary policy for 2007-2008 has given a fillip to the alternative investment industry in India.
In a move to usher the capital and current account convertibility of the rupee the RBI has increased the present limit for individuals for any permitted current or capital account transaction from $50,000 to $100,000 per financial year.The current account convertibility was established with the acceptance of the obligations under Article VIII of the IMF’s Articles of Agreement in August 1994.
Driven by the need to increase their assets under management Hedge funds have reduced their minimum investment limits from $1mn to 200,000$ and even 100,000$ overseas and to tap the retail markets launched mutual funds that invest in them.This move by the Hedge fund community over the years coupled with the government's incentive gives a strong case for Hedge fund investments in India.
The SEBI has laid down the guidelines for the direct registration of hedge funds.What is to be seen is that how these funds interpret this move by the RBI.
Read the Hindu article
$100,000 limit puts hedge funds within reach of Indian investors
In a move to usher the capital and current account convertibility of the rupee the RBI has increased the present limit for individuals for any permitted current or capital account transaction from $50,000 to $100,000 per financial year.The current account convertibility was established with the acceptance of the obligations under Article VIII of the IMF’s Articles of Agreement in August 1994.
Driven by the need to increase their assets under management Hedge funds have reduced their minimum investment limits from $1mn to 200,000$ and even 100,000$ overseas and to tap the retail markets launched mutual funds that invest in them.This move by the Hedge fund community over the years coupled with the government's incentive gives a strong case for Hedge fund investments in India.
The SEBI has laid down the guidelines for the direct registration of hedge funds.What is to be seen is that how these funds interpret this move by the RBI.
Read the Hindu article
$100,000 limit puts hedge funds within reach of Indian investors
Friday, May 11, 2007
LBO'S in India in the long term???
The Private Equity Industry in india has ripened to a stage where it needs regulatory legislations so as to accelerate the development of the capital markets in India.
The current SEBI laws do not allow firms to pick up more than minority stakes in Indian entities.The ban on leveraged buy-outs is a constraint, which is the preferred mode of entry for many private equity firms.
Other regulatory obstacles include foreign ownership and investment restrictions, for instance in the aviation and publishing industries, that make departing from this sort of business more difficult.There are cultural barriers where the founding entrepreneur may wish to bring in money and management expertise through PE funds but do not have the appetite for handing over the reins to them.
The recent influx of investors in the stock markets would begin to reduce return which gives a stong case for Private Equity growth in India, though on the flipside PE funds have a history of job sacking and asset stripping realizing huge profits from that.They also have the uncanny ability to takeover businesses at low premiums which might effect investors.These doesnt make things easy for the regulatory authorities and they will find it difficult to give them unmarked access to the Indian markets.
But the real question is that is it the right time to let loose entities who have been labelled by many as 'barbarians'?
On a personal level, i think that the indian markets are not mature enough and still is highly imperfect to sustain a sudden change in the regulatory issues and allow highly risk activities such as LBO'S,which may see a sudden shift in liquidity trends from other AMC'S on the back of global perfomance and may cause a collapse that can trigger financial instability, however i endorse the government taking a stand on this issue and allow such activities over a period of time which will help investors gain more out of the markets and at the same time have the markets realize the cons of getting linked with these funds.The top private equity firms have been consistently outperforming the markets elsewhere and i find no reason why they can't produce the same results in India.
Private Equity activities in India reached its peak after domestic funds were able to raise $1.8 bn from the market and foreign funds from Carlyle to Blackstone betting on the markets.
India was the biggest recipient of private equity investment in Asia last year, with 143 deals worth a total of $2.21bn, according to figures from Thomson Financial, the data group.
The current SEBI laws do not allow firms to pick up more than minority stakes in Indian entities.The ban on leveraged buy-outs is a constraint, which is the preferred mode of entry for many private equity firms.
Other regulatory obstacles include foreign ownership and investment restrictions, for instance in the aviation and publishing industries, that make departing from this sort of business more difficult.There are cultural barriers where the founding entrepreneur may wish to bring in money and management expertise through PE funds but do not have the appetite for handing over the reins to them.
The recent influx of investors in the stock markets would begin to reduce return which gives a stong case for Private Equity growth in India, though on the flipside PE funds have a history of job sacking and asset stripping realizing huge profits from that.They also have the uncanny ability to takeover businesses at low premiums which might effect investors.These doesnt make things easy for the regulatory authorities and they will find it difficult to give them unmarked access to the Indian markets.
But the real question is that is it the right time to let loose entities who have been labelled by many as 'barbarians'?
On a personal level, i think that the indian markets are not mature enough and still is highly imperfect to sustain a sudden change in the regulatory issues and allow highly risk activities such as LBO'S,which may see a sudden shift in liquidity trends from other AMC'S on the back of global perfomance and may cause a collapse that can trigger financial instability, however i endorse the government taking a stand on this issue and allow such activities over a period of time which will help investors gain more out of the markets and at the same time have the markets realize the cons of getting linked with these funds.The top private equity firms have been consistently outperforming the markets elsewhere and i find no reason why they can't produce the same results in India.
Private Equity activities in India reached its peak after domestic funds were able to raise $1.8 bn from the market and foreign funds from Carlyle to Blackstone betting on the markets.
India was the biggest recipient of private equity investment in Asia last year, with 143 deals worth a total of $2.21bn, according to figures from Thomson Financial, the data group.
Big names gear up to pick up stake in Reliance MF
Big private equity and asset management firms have lined up for a small stake in Reliance MF. Blackstone, the big US PE firm which has operations in India will look to build a relationship base with what is the biggest Asset management company in India and has Assets Under Management(AUM) which are scaling new heights, recently surpassing the 50,000 crore mark.
Reliance MF which is eyeing a valuation of 1.2 billion dollars (10% of the total AUM) is also on the radar of Schroder’s, the British fund with assets of about $260 bn after speculation that it wants to enter the Asset Management business in India and one of the units of US based Capital.
If this deal does go through it will help the foreign investors to cement a relationship with one of the biggest money mangers in the world .The industry’s AUM has witnessed a growth of almost 85% over two years starting 2005 April, and with the future looking bright these foreign firms could not have possibly found a better opportunity to build on a base starting with the leader in the Indian Markets .On the other hand it’s a win-win situation as far as Reliance Capital is concerned as it will give the company valuable know-how and technical proficiency in the Financial Services industry with the biggest names on its board. Valuations are also going crazy with the firm hitting a new high on the BSE.
Even if the offer is not accepted it has showcased the potential for the growth of the industry, with the American and the European markets approaching perfection and that these investors are finding it hard to outperform the markets there, they are looking at offshoring their business to low cost and high return destinations on the long term like India.
Related articles:
Schroders looking to join the AMC brigade
Reliance MF which is eyeing a valuation of 1.2 billion dollars (10% of the total AUM) is also on the radar of Schroder’s, the British fund with assets of about $260 bn after speculation that it wants to enter the Asset Management business in India and one of the units of US based Capital.
If this deal does go through it will help the foreign investors to cement a relationship with one of the biggest money mangers in the world .The industry’s AUM has witnessed a growth of almost 85% over two years starting 2005 April, and with the future looking bright these foreign firms could not have possibly found a better opportunity to build on a base starting with the leader in the Indian Markets .On the other hand it’s a win-win situation as far as Reliance Capital is concerned as it will give the company valuable know-how and technical proficiency in the Financial Services industry with the biggest names on its board. Valuations are also going crazy with the firm hitting a new high on the BSE.
Even if the offer is not accepted it has showcased the potential for the growth of the industry, with the American and the European markets approaching perfection and that these investors are finding it hard to outperform the markets there, they are looking at offshoring their business to low cost and high return destinations on the long term like India.
Related articles:
Schroders looking to join the AMC brigade
Friday, May 4, 2007
Godrej Sara Lee may take over Sara Lee business in India
Godrej Sara Lee, the joint venture company between the Godrej Group and US-based Sara Lee Corporation, is in discussions to take over Sara Lee’s independent business unit in India. While Sara Lee has a 51 per cent stake in Godrej Sara Lee (GSL), a household product company, it also has an independent unit, Sara Lee Household and Body Care India, which is headquartered in Chennai. The independent unit markets brands like Kiwi shoe polish, drain cleaner Kiwi Dranex and hair care brand Brylcreem in India. It is believed that the business and operations of Sara Lee Household and Body Care will be transferred to GSL. Sources familiar with the discussions said the size of the transaction is estimated to be in the range of Rs 100 crore. At present, Godrej Sara Lee’s portfolio largely consists of household insecticide brands like Hit and Good Knight in India, apart from Sara Lee’s air purifier brand, Ambi Pur. Industry sources said Sara Lee was keen on moving all its brands to one company to better manage its portfolio in India.
Wockhardt will pay $265 million (Rs 1,090 crore) in cash to acquire Negma Laboratories
Wockhardt will pay $265 million (Rs 1,090 crore) in cash to acquire a research-based French pharmaceutical company,Negma Laboratories. This means a valuation of 1.8 times the sales and 9.7 times the EBIDTA. While the valuation seems reasonable, if measured against revenues, it is relatively high when one looks at the EBIDTA multiple. Wockhardt will fund the acquisition through internal accruals and debt; it has about $250 million on its books as cash. But more importantly, the acquisition gives Wockhardt a portfolio of patented products.
The management expects the takeover to reflect in its performance from the third quarter. Indian pharma companies are vying for a global presence in the branded generic drug space. Dr Reddy’s had recently acquired German generic drug maker Betapharm.
Earlier, Wockhardt acquired companies in the UK (Wallis and CP Pharmaceuticals), Germany (Esparma) and Ireland (Pinewood Labs). With this acquisition in France, the company effectively covers the whole of Europe. This acquisition helps the company get a strong foothold in the French generic market, which is valued at about $2 billion.
With this acquisition, the management has raised its estimate of group turnover by $90 million to $590 million for FY07. The European business will account for more than 60% of total revenues. The key concern, however, could be the acquisition’s impact on margins. Margins could get hit by about 100 basis points during the current year, as Negma recorded an EBIDTA margin of about 18% last year.
The management expects the takeover to reflect in its performance from the third quarter. Indian pharma companies are vying for a global presence in the branded generic drug space. Dr Reddy’s had recently acquired German generic drug maker Betapharm.
Earlier, Wockhardt acquired companies in the UK (Wallis and CP Pharmaceuticals), Germany (Esparma) and Ireland (Pinewood Labs). With this acquisition in France, the company effectively covers the whole of Europe. This acquisition helps the company get a strong foothold in the French generic market, which is valued at about $2 billion.
With this acquisition, the management has raised its estimate of group turnover by $90 million to $590 million for FY07. The European business will account for more than 60% of total revenues. The key concern, however, could be the acquisition’s impact on margins. Margins could get hit by about 100 basis points during the current year, as Negma recorded an EBIDTA margin of about 18% last year.
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