American Tower closing in on Tata Tele stake

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

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

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%

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

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

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

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

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

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

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

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

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

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

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.

Read More on Business Standard

The CDS Iceberg

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

India on Kuwait Finance House's Radar

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

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.

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

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

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