Chinese biggies want to enter Indian car market

The Chinese dragon has set its eyes on the Indian car market. Two biggies Chery Automobile and Great Wall Motors are planning to enter India soon through joint ventures, senior company officials told TOI at Shanghai Motor Show.

"We are looking at a joint venture partner for India as it holds a good potential for car sales in the coming time," Chery Automobile president Yin Tongyao said. He termed India as a "very important" market and said the company was looking at "several proposals" for finalising a local partner.

Chinese carmakers are shifting focus from their main markets like US and Europe as volumes there are shrinking due to the global slowdown. At the same time, India's rising status as one of the fastest-growing car markets in the world, spells opportunities.

Chery was believed to be in talks with tractor maker Sonalika's car venture, International Cars & Motors Ltd (ICML), around three years back to roll out its small car in India. But the talks never fructified into a joint venture. Chery, famous for its small car QQ, is eyeing sales of 4.19 lakh units in 2009, an 18% increase over 2008. The QQ comes in two petrol engine sizes 0.8-litre and 1.1-litre.

Gavin Chen, marketing specialist with Chery's international division, said the company plans to sell cars in India by 2010. "While initially we will look for a distributor, the final plan is to build a factory in India." Chen said the company saw India as a big market due to its huge population and thus wanted to develop some specific models. "The plan is to make cars at good price with good quality," he added.

Great Wall Motor (GWM) listed on the Hong Kong Stock Exchange is China's largest privately-owned car maker and specializes in SUV and utility models, while recently expanding into the multi-purpose vehicle and hatchback segment.

Chris Guan, GWM's South Asian region GM, said the company wanted to launch at least one or two models in India this year. "We are currently evaluating partnerships. Initially, we are looking for a distributor for which we have been contacted by some companies," he said.
On 100%-plus import duties, he said the company wanted to have a partner that can assemble the models. "If the partner has a factory, the customs duty can be reduced," he said. GWM sold 1.25 lakh units in 2008 and exports cars to countries like Russia, Ukraine, Egypt, Senegal and the Middle-East region.

DSP BlackRock to shut down part of Portfolio business in India

Leading asset manager, DSP BlackRock Investment Managers has decided to close down a part of its portfolio management services (PMS) business in India by June end. DSP BlackRock decided to scrap the segment primarily owing to a stagnant growth seen in the division in last 12 months and taking into account the small size of the portfolio, a company official said.

"The growth in PMS segment has been stagnant in the last 12 months. Besides, the segment's contribution to the total business is not significant. Hence we decided to shut down the unit," the official said.

DSP BlackRock's PMS portfolio comprises Rs 60 crore in discretionary assets and Rs 188 crore structured products. While the Rs 60 crore discretionary assets will be liquidated in the next four to six weeks, the company would retain the structured product asset part, the official said.
"DSP BlackRock will go ahead with our expansion plans, primarily increasing our presence in the country by opening new branches," the official said.

(Source: Economic Times)

Top-level rejig at Aditya Birla Nuvo; Rakesh Jain named MD

The Aditya Birla group on Tuesday announced top-level reshuffle at Aditya Birla Nuvo. The Birla group, one of India’s largest conglomerates, said it had appointed Rakesh Jain as managing director of Aditya Birla Nuvo, due to the completion of the tenure of the current MD Bharat Singh.

Mr Singh is likely to be given a new responsibility to look after the various trusts of the group. Although this wasn’t immediately confirmed, the Birlas have a precedent of moving their senior executives into advisory roles or as part of in-house thinktank, post retirement.

When contacted, group HR director Santrupt Mishra said: “We are looking for a new role for Mr Singh. Nothing has been finalised as yet.” The group’s corporate norms stipulate 62 years as the retirement age for executive directors. Mr Singh is scheduled to retire in July.

Mr Jain had come from one of the largest conglomerates, General Electric, and is hence considered apt for Aditya Birla Nuvo that has a presence in varied businesses such as textiles, life insurance and telecom.

Adesh Gupta, CFO and whole-time director at Aditya Birla Nuvo, has been appointed as CFO of Grasim Industries from May 1, 2009. Sushil Agarwal, who is currently the president of Birla Global Finance, will be taking over as CFO of Aditya Birla Nuvo.

Pranab Barua, the business director for garments for Aditya Birla Nuvo, has been inducted as whole-time director on the board of the company. “We have always appointed people from within the organisation as part of the senior executive team,” said Mr Mishra who has also been appointed as head of the carbon black business of the company.

Source: Economic Times

Britannia Ind to buy Fonterra's stake in NZ JV

Britannia Industries Ltd has informed BSE that the company has entered into an agreement dated April 28, 2009 with Fonterra Brands (Mauritius Holding) Ltd, Mauritius, for acquiring the latter's 49% Equity and Preference shareholding in Britannia New Zealand Foods Pvt Ltd (BNZF), their joint venture company engaged in Dairy business. This acquisition is subject to Reserve Bank of India approval. With this acquisition, Britannia along with its wholly owned subsidiary will hold the entire equity and preference capital of BNZF.

Source: Business Line

Vedanta says buys 9.5 percent stake in HudBay

Indian mining group Vedanta Resources Plc (VED.L) said on Monday it had bought a 9.5 percent stake in Canada's HudBay Minerals Inc (HBM.TO) but gave no reason for the move. London-listed Vedanta, India's largest base metals miner, confirmed a Globe and Mail newspaper report that it had bought the stake, 14.5 million hudBay shares, through a subsidiary, Lakomasko BV, a privately-held company based in Amsterdam. "They do control that stake. It (Lakomasko) is an organisation that is controlled by Vedanta Resources," Vedanta spokesman Robin Walker said in London, declining further comment. HudBay shares were up 3.3 percent to C$7.83 by 1515 GMT, adding to a 9 percent rise on Friday. The shares have more than doubled in 2009 since ending last year at C$3.06. The Globe identified K. Coimbatore Venkatakrishnan as the principal and top executive of Lakomasko. He was the chief executive of Vedanta's Konkola Copper Mines in 2006. KCM is Zambia's largest copper producer. Vedanta, which has been aggressively expanding outside its home base in India, last week got approval from a U.S. bankruptcy judge to go ahead with a plan for its unit Sterlite (STRL.BO) to buy copper miner Asarco LLC for $1.7 billion. [ID:nN22274894] HudBay chief executive Peter Jones began his second stint as CEO last month after a failed attempt to take over fellow Canadian miner Lundin Mining (LUN.TO) prompted a shareholder revolt that forced the company's former board and management to step down. Jones's first turn as CEO ended when he was pushed out in January 2008 for not seeking acquisitions aggressively enough. He said in March that HudBay would try to expand through takeovers, and may be open to overtures from larger players. Jones was part of a slate put forward by shareholder SRM Global Master Fund, which wanted HudBay to distribute its war chest of approximately C$700 million to shareholders. Jones has said the company will only do that if attempts to expand through acquisition fail.

Source: Reuters

Marico scouts for buys in domestic market

As part of its inorganic growth strategy, FMCG major Marico Ltd is aggressively scouting for acquisitions in domestic markets. The company is planning to acquire two regional brands in the beauty & wellness sector in India. Currently, the company is in talks with two players based in southern states in this space, informed industry sources. Incidentally, Marico has decided to divest its entire stake in its wholly owned subsidiary Sundari LLC which is engaged in the manufacturing and marketing of skincare cosmetics in the USA. According to industry analysts, Marico will be investing in domestic acquisitions after completing its formalities to divest stake in Sundari LLS. “Since the acquisition of ‘Manjal’ (herbal soap) in Kerala in 2006, Marico has been scouting for southern skin care brands for a while”, said an analyst based in Mumbai. In 2006, Marico had bought out Hindustan Lever Ltd's Nihar brand for a Rs 227 crore. In the same year, the company also acquired Fiancee (a hair care brand) from Egypt-based Ready Group.
When contacted, Chaitanya Deshpande, head of Mergers & Acquisitions (M&A), Marico declined to comment on Marico’s specific acquisition plans. “The company has identified inorganic growth as part of its corporate strategy and is open to considering acquisition opportunities. We can not comment on any specific opportunities,” he said. On the rationale behind Marico’s decision to divest in Sundari LLC, Deshpande said that a majority of Sundari’s revenue is generated from B2B sales to spas located within luxury resorts and hotels globally. “Sundari constituted only a small share of Marico’s revenue. Moreover, the US which is Sundari’s base, has not been a part of Marico’s focus geographies for growth, which has come increasingly from Asia and Africa. The divestment is thus a logical part of Marico’s global strategy,” he added. The Group posted a net profit of Rs 188.7 crore for the year ended March 31, 2009, 11.6 % higher than the Rs 169 crore net profit for the year ended March 31, 2008. The group’s total income rose by 25 % to Rs 2402.6 crore for the year, compared to Rs1914.5 crore for the previous year. Enthused by its performance in FY 09, Marico is planning an increase in its advertising and marketing spend in 2009-10

Source: Financial Express

Philip Morris, Modis settle Marlboro row

US tobacco giant Philip Morris and its Indian joint venture partner, the KK Modi group, have decided to settle their dispute over the sale of Marlboro cigarettes in India, in what is being seen as a tactical retreat by both companies keen on gaining market share. The board of Godfrey Phillips India (GPI), where the two firms own a 36% stake each, decided on Saturday to start negotiations with Philip Morris to market Marlboro through the GPI distribution network in India. The two companies had clashed in 2003 after Philip Morris bypassed its Indian partner and struck an arrangement with a local distributor to sell Marlboro in India. The US company had said at that time Marlboro, its iconic brand immortalised by the picture of a cigarette-toting cowboy, was too precious to be given to a company not controlled by it. The subsequent thaw and Saturday’s decision to bury the hatchet is being attributed to a serious deterioration in GPI’s competitive position and the ever increasing dominance of ITC, part owned by British American Tobacco, Philip Morris’ big global rival. India’s 96 billion sticks-a-year cigarette market is dominated by ITC with about 65% share. GPI’s Four Square, Jaisalmer are small players in the premium segment, which itself comprises 60% of the total market. KK Modi, chairman of the company, declined to comment on Saturday’s board decision, but a person close to the devlopment said the move is largely to combat ITC’s hegemony. “The standoff has not helped either GPI or Philip Morris’ plans in India. Marlboro will add to GPI’s portfolio a high-end brand with strong consumer pull which it always lacked. The board has been formally informed about discussions with Philip Morris, but this does not imply that a deal has been finalised,” said the person, requesting anonymity. GPI shares jumped 20% or Rs 166.25, to close at Rs 997.60 on BSE. In January last year, ET had first reported about early talks between GPI and Philip Morris to cut a marketing and distribution deal for Marlboro. Although an executive close to the development said that Marlboro will be imported and marketed in India, another person familiar with the matter said that Philip Morris International has already done due diligence on two GPI plants in Mumbai and Ghaziabad, suggesting that the deal may involve local manufacturing of Marlboro. While the government will not allow any expansion in production, the person said that GPI had idle capacity as cigarette production declined during FY09, with firms stopping production of non-filter cigarettes due to the high excise duty. Philip Morris is likely to invest in marketing, while GPI will be involved in manufacturing and distribution. In fact, GPI has been bolstering its distribution strength in the southern and eastern states, areas considered weak for the company. Philip Morris is likely to keep its 100% India arm, set up to import and distribute Marlboro, as a shell company that will hold the brand rights, people familiar with the situation said. Philip Morris was interested in acquiring its partner's stake in GPI, but Mr Modi has steadfastly refused its overtures for years. Besides, the government's refusal to countenance any increase in foreign holding in the tobacco industry also meant share buyout was not a straight-forward affair. The Union health ministry’s curbs on cigarettes (it banned smoking in public places last year) and Philip Morris’ realisation that it can’t do much on its own could also have contributed to the climbdown by the foreign firm. Cigarette advertsing is banned in India and the government doesn’t allow companies to increase capacities for manufacturing cigarettes. Japan tobacco has been trying to increase its stake in its Indian JV, but the government has still not cleared it. “Keeping in mind the numerous restrictions, it is best to utilise the current JV to push its brand in India. Afterall it is distribution that can lead to increased sales,” one industry official said. In 2003, Philip Morris Services India bypassed GPI and entered into an agreement with Barakat Foods & Tobacco (BFT) for the distribution of Marlboro cigarettes in India. The company directly imported the product, which was then distributed by BFT under a non-exclusive agreement. Also, smuggled cigarettes, especially the Marlboro brand, have been selling very well in India. According to industry estimates, of the 250 million cigarettes that come to India every year, Marlboro alone accounts for 100 million. Philip Morris has an India office, which is the subsidiary of Switzerland-based tobacco company Philip Morris International. Its global brand portfolio includes L&M, Parliament, Chesterfield, Bond Street, Philip Morris, Lark, Virginia Slims and Marlboro, none of which are marketed by GPI in India. Philip Morris Inc joined hands with the KK Modi Group in 1979.

Source: Economic Times

RPT-3i Infotech to buy biz from JP Morgan Treasury

3i Infotech Ltd on Monday said it agreed to buy J.P. Morgan Treasury Services' national retail lockbox business (NRLB) to expand capacity and capabilities of its unit Regulus. "Virtually all NRLB employees have been offered positions with Regulus, which will process more than 700 million payments annually once after the deal. Financial details of the deal were not disclosed.
Source: Reuters

Piramal plans to buy 2-3 firms in U.S., Europe

Piramal Healthcare Ltd is eyeing acquisitions in the U.S. and Europe, and expects growth in business during the current fiscal year to remain same as that in FY09, a senior official said on Wednesday. "We expect to buy 2-3 companies in advanced markets like the U.S. and Europe," Swati Piramal, director, Piramal Healthcare told reporters. "The company expects the same level of growth as witnessed in the last fiscal," she said, adding the firm plans to add 300-400 professionals in the super-speciality marketing division. She ruled out any proposal to sell stake in Piramal Healthcare or Piramal Life Sciences Ltd.

Source: Reuters

Insecticides India to merge Advance Crop Solutions Ltd

Insecticides India Ltd has announced that the meeting of the Board of Directors of the Company was held on April 24, 2009. During the course of the meeting, as part of any other item of the Agenda, it was proposed by one of the Directors to consider amalgamation of Advance Crop Solutions Ltd (a wholly owned subsidiary of the Company) with the Company. The Board considered that the Company is not required to issue any further shares of account of amalgamation. The Board further noted that the transferor Company is also a profit making Company and hence the merger of wholly owned subsidiary with the Company will not be prejudicial to the interest of the shareholders and creditors of the Company in any manner.The Board constituted a committee of 3 directors comprising of Mr. Rajesh Aggarwal, Mr. Navneet Goel and Mr. Gopal Chandra Aggarwal, to finalize the Scheme of Amalgamation in consultation with the legal advisors, to do all other acts and deeds as may be required in relation thereto and to arrange to file the same with the stock exchanges.

Source: EquityBulls

Escorts Limited to consider merger with American unit on Apr 29, 2009

Escorts Ltd, the agro-machinery arm of the Escorts group, has announced that a meeting of the board of directors of the company will be held on April 29, 2009, to consider and approve the merger of its wholly owned subsidiary, Escorts Agri Machinery Inc (USA) with itself and any other consequential matters therein. The Escorts Group is operating in the high growth sectors of agri-machinery, construction & material handling equipment, railway equipment and auto components. Having pioneered farm mechanization in the country, Escorts has played a pivotal role in the agricultural growth of India for over five decades. One of the leading tractor manufacturers of the country, Escorts offers a comprehensive range of tractors, more than 45 variants starting from 25 to 80 HP. Escort, Farmtrac and Powertrac are the widely accepted and preferred brands of tractors from the house of Escorts. In the auto components segment, Escorts is a leading manufacturer of auto suspension products including shock absorbers and telescopic front forks. Over the years, with continuous development and improvement in manufacturing technology and design, new reliable products have been introduced.

Source: Economic Times

ITC raises stakes in hotel rivals

ITC’s appetite for hotel rivals continues unabated. The diversified company from Calcutta has built up further positions in Hotel Leelaventure and EIH Ltd. Russel Credit, the investment arm of ITC, bought around 27.1 lakh shares in Leelaventure between January and March. During the same period, it acquired 93,943 shares in EIH, raising its holding to 14.98 per cent. This is the highest ITC has held in EIH, which owns Oberoi Grand in Calcutta, in the last seven years. ITC is now just 78,333 shares away from triggering an open offer. According to the Substantial Acquisition of Shares and Takeovers regulation of the Securities and Exchange Board of India, a company has to make a mandatory open offer for an additional 20 per cent once its holding in an entity reaches 15 per cent. As on December 31, 2008, ITC held 14.96 per cent in EIH. ITC has maintained that the share purchase is not strategic. In Leela, its stake is 3.72 per cent, which is not significant, though it is steadily acquiring shares. ITC checked into the Bangalore-based hotel chain in the September-December quarter of the last fiscal with a 3 per cent stake, as The Telegraph had first reported. When contacted to comment on ITC’s buying spree, an ITC spokesperson said, “These are routine treasury operations.” In the past, the EIH management had not given much importance to ITC’s shareholding in the company. ITC’s stake had remained near 15 per cent for a long period. Unless the cigarette-to-hotel conglomerate crossed the threshold, there was nothing for EIH to talk about, EIH officials had said. Leela has also remained silent on ITC’s overtures so far. “We do not disclose our plans. But as you can see, it is listed as a long-term investment in the balance sheet,” ITC chairman Yogi C. Deveshwar had said, while commenting on his company’s strategy for EIH at the annual general meeting in July 2008. ITC had picked up a stake in EIH — which owns and manages the Oberoi chain of hotels in India and abroad — in 2001, fuelling speculation of a hostile takeover. However, ITC held on to its stake without threatening to replace the EIH promoters or the management during the period. In the meantime, it strengthened its presence by setting up hotels. Promoters P.R.S. Oberoi and his family own a 46.42 per cent stake in EIH. If ITC decides to make an open offer for another 20 per cent, it cannot hope to get control of EIH unless a section of the promoter family offload their stake. ITC’s stake purchase in Leela would also not give the Nairs — the promoters of Hotel Leelaventure — any cause for worry as they hold a majority 51.56 per cent in the company. ITC ranks somewhere in the middle between EIH and Leela. EIH, formerly East India Hotels, has a bigger presence than ITC in India and abroad. ITC does not have an overseas hotel. Leela, on the other hand, is on an expansion mode, building on its oldest and most successful hotel in Bangalore.

Source: Telegraph

Air India gets new interim chief

Unhappy with the performance of state-run carrier Air India, the government has decided to appoint an interim chairman and managing director for the carrier in place of incumbent Raghu Menon, officials said. A simultaneous talent search has also been launched to find a regular chief to run the National Aviation Company of India Ltd, that was formed last year after Indian Airlines was merged into Air India. Menon, an officer of the Indian Administrative Service (IAS), is being replaced by another officer from the service, E.K. Bharat Bhushan, who currently serves as joint secretary and financial adviser in the civil aviation ministry. The decision was taken after a high-power meeting here Friday chaired by Cabinet Secretary K.M. Chandrasekhar and also attended by Principal Secretary in Prime Minister's Office T K A Nair and Civil Aviation Secretary M Madhavan Nambiar. "Mr. Menon may be considered for the new regulatory authority for the sector. He is currently on leave," a senior official in the ministry said, referring to the proposed Airports Economic Regulatory Authority. Bharat Bhushan will continue to serve as joint secretary and financial adviser. The change has come in the backdrop of falling market share of the state-run carrier even though it is going through a major fleet expansion programme to induct 111 new Boeing and Airbus aircraft over the next few years. The company has already sought Rs.2,500 crore from the government in the form of equity and soft loan to finance the fleet expansion - 68 aircraft from the US manufacturer and 43 aircraft from the European consortium. Officials said the merger between Air India and Indian Airlines, with the stated objective of greater operational synergies, has also not been smooth, delaying the carrier's bid to join the Star Alliance, the leading global interline pact. A new role for Menon will be decided soon, even though his immediate predecessor at Air India, V Thulasidas, is also said to be in contention for the top post at the new aviation regulatory.

Source: Economic Times

Elder Health Care eyeing brand acquisitions

Elder Health Care, the FMCG arm of the Rs 560-crore pharma major Elder Group, is evaluating two Indian brands for acquisition. The two potential targets are in the areas of oral care and body care and will help Elder consolidate its presence in the personal care segment. Elder expects to close each of the deals at a valuation of Rs 5-10 crore. The company wants to complete the acquisitions soon since it wants to capitalise on the present moment when valuations are low. "We are looking at acquisitions to consolidate our presence in the personal care segment. We soon plan to appoint a merchant banker for reviewing the deals," Elder Health Care Ltd managing director Anuj Saxena told ET. Incidentally, Elder already has an oral care brand AMPM Mouthwash. Other popular brands include Fairone (fairness cream), Tiger Balm (pain relief) and the recently launched deodorant body spray ‘Fuel for Men’ in partnership with VLCC. Elder, on Friday, announced its plan to enter the Indian colour cosmetics market. Elder has entered into an exclusive marketing agreement with Germany’s Innovative Cosmetic Brands GmbH to roll out their mid-to-premium segment brand ‘BeYu’ in India. The range will comprise mineral make up, lipstick, foundation, eye shadow, mascara, eye liner and nail enamel. The brand will target urban women in the 25-40 years of age. "Innovative Cosmetic has another premium brand ‘Artdeco’ which we might bring into India. We plan to bring another 2-3 foreign brands in this segment to grow the colour cosmetic segment," said Mr Saxena. The Indian make-up market is estimated at Rs 1,000 crore and growing annually at 30%. Of this, the premium segment is worth around Rs 350-400 crore. Elder also plans to expand its men grooming portfolio by extending the ‘Fuel for Men’ brand into hair gel and after-shave products. "We might foray into the male cologne segment. The idea is to consolidate our presence in the personal care segment with launch of several SKUs," said Mr Saxena.

GMR may take over English Premier League Club Liverpool for £450 mn

Indian billionaire Grandhi. Mallikarjuna Rao may take over English Premier League Club Liverpool for £450 million (around Rs3,300 crore), British newspaper ‘News of the World’ has reported. Rao, who owns Indian Premier League cricket team Delhi Daredevils, is considering a major investment in Liverpool after its co-owner Tom Hicks approached him for a sponsorship, the report said. However, a GMR spokesperson denied the reports. “GMR has no interest in Liverpool, and as a policy, we do not comment on speculative news,” the spokesman told Mint.
It all started with the American co-owners, Hicks and George Gillett, wanting to sell the club for £450 million or invite huge investment to back Liverpool’s re-emergence as a title force.
The two have endured a fractious relationship since joining forces at Liverpool, arguing over the governance and direction of the club, but recently have presented a united front as they strive to attract new finance.

Source: LiveMint

BSNL partners Nokia for 3G services

BSNL, India's third largest mobile company in terms of subscribers, has tied up with Finnish cellphone major Nokia for bundling 3G handsets along with its services. A senior BSNL official told PTI that the PSU has tied up with Nokia to supply handsets for its 3G subscribers. Nokia India Head, Operator Channels, V Ramnath said "Nokia India has partnered BSNL in bringing to Indian consumers 3G services on a host of Nokia devices." Nokia 3120Classic, Nokia 5320, Nokia N79, Nokia N81, Nokia E71 and the Nokia 5800Xpress Music will be offering BSNL 3G services. Owners of these devices will be able to avail of talktime as well as data packages across various price plans, he said. "We are also in discussions with BSNL to offer its subscribers a combination of free as well as paid for applications in order to further enhance consumer experience, Ramnath said. Chalking out an aggressive strategy to garner more 3G mobile subscribers, BSNL has also tied up with consulting arm of Swedish telecom equipment vendor Ericsson as part of its 'Go To Market' strategy. It will perform network improvement and optimisation services for the core, radio and transmission networks installed by its parent Ericsson," a senior official of the PSU had told media. BSNL is not positioning 3G service for the mass market, he said. The official, who did not wish to be named, said the PSU has reported 8,000-10,000 subscribers since its launch few months ago. However, industry sources disputed this figure saying the company may have garnered not more than 2,000 customers over 24 cities. Private players are yet to start the 3G service as they would get the required spectrum through auction, which is yet to take place. Till they launch the service, BSNL is trying to leverage its first mover advantage. BSNL launched 3G mobile services in February. The 3G services enables video streaming applications such as Live TV, movie downloads, high speed data download on mobile phones. Callers can also see each other on their mobile phone screens.

Source: Economic Times

Infy BPO to buy captive operations of clients

Infosys BPO, the back-office arm of India’s second-biggest software exporter Infosys, plans to acquire captive operations of customers, the company seeks to grow its share of the $80-billion global BPO market. Almost two years ago, Infosys BPO acquired back office operations of Philips, which assured around $250 million in revenues over the next few years. The acquisition helped Infosys gain entry into Poland and other European countries. “We are open to similar takeovers if the right deal comes through,” Infosys BPO CEO Amitabh Chaudhry said. “We are not looking at opening any new centres across the globe, but if such a deal comes along that requires them to have a facility, then we would go ahead.” Infosys BPO entered into a seven-year contract with Royal Philips Electronics of Netherlands to provide finance and accounting services and the processing of purchasing orders in a deal valued at $250 million. The Philips centres are turning profitable, Mr Chaudhry added.

Merieux Alliance Part Selling from Shantha Biotech

French healthcare company Merieux Alliance, which holds a 78.85 per cent stake in Hyderabad-based vaccine manufacturer and biopharmaceutical firm Shantha Biotechnics, might dilute some of its stake, according to Shantha founder and MD KI Vara Prasad Reddy. The company has, however, assured to remain a majority stakeholder and hold at least 51 per cent to ensure that the new partner did not bring a drastic change in the line of operations. The dilution of stake is to bring in new technology, new products or enter new markets or a combination of these. Reddy holds a 14.1 per cent stake in Shantha. The French company picked up a majority stake (60 per cent) in Shantha Biotechnics in November 2006 from Oman-based financial firms to strengthen its India presence. On reports that Shantha was a target for an acquisition, he said the company was attractive with proven capabilities in vaccine development and market penetration and, therefore, many companies including one from Hyderabad were eyeing to acquire it. "I declined to sell my stake in the company so some of them are approaching Merieux for dilution of its stake,'' Reddy said, adding the company, which is not seeing any drastic upward or downward surges, had been getting acquisition proposals from various companies since the late 90s.
Interacting with the media here on Friday on the sidelines of announcing the launch of Shanchol, an oral cholera vaccine, he said the company would continue to work on low-cost vaccines. Shanchol would be priced at about Rs 300 per dose of 1.5 ml and two doses were needed to give protection against cholera for about four years. The commercial launch would be in June or July.
The company has invested about Rs 5 crore over three years in developing Shanchol in collaboration with the International Vaccine Institute, Seoul. It received funding from the Bill and Melinda Gates Foundation for the project. Currently, the Hyderabad facility has a capacity to manufacture 5 million doses, which would be ramped up to 25 million doses in about six months.

Source: Business Standard

Govt gets more sovereign fund proposals from Middle-East

After setting up a sovereign fund with Oman, the government is now understood to be in talks with other Middle-East countries to set up a similar fund. As part of the initiative, the government has already finalised details for another multi-billion dollar joint investment fund with Qatar. Bankers feel that given the liquidity crunch faced by the infrastructure sector, these sovereign funds would offer it a fresh lease of life. Given the growing infrastructural requirements, these funds would help enhance market liquidity and facilitate a more efficient allocation of resources. A senior finance ministry official, who refused to be identified, said that the government is currently examining proposals from other Gulf countries as well. "There have been similar requests. The approval would depend on the nature of the fund and the bilateral relations between the two countries," the official said. According to the official, the rush is due to the fact that the Middle-East countries are flush with funds and India is an exciting destination. Already, the government has chosen a public sector entity, State Bank of India (SBI), to act as nodal agency for operating the joint investment fund with Oman and Qatar. Earlier this year, the government had signed an memorandum of understanding (MoU) with the Oman government to that effect. When contacted, State Bank of India chairman O P Bhatt told SundayET that such a proposal is being worked out with Oman. However, he refused to share details saying, "it's too early to divulge anything." The multi-billion dollar joint investment fund with Qatar will explore investments in the infrastructure sector in the two countries. An economist said the Middle-East countries are in a position to invest, thanks to the petro dollars. "These nations have deep pockets. The countries in the Middle-East now want to diversify their risks and invest outside the West, where traditionally they've been a large investor," he said. The Middle-East boasts of some of the biggest Sovereign Wealth Funds in the world. The biggest one is the Abu Dhabi Investment Authority, with $875 billion in assets under management. The Oman and Indian governments' $100 million Joint Investment Fund intends to invest in core infrastructure and real estate sectors.

ICICI Bank Management Rejig: Vaidyanathan Moves To ICICI Pru

Ahead of Chanda Kochhar taking over as the new MD & CEO of ICICI Bank, the India's largest private sector banking group has effected many other changes at the top level. V. Vaidyanathan, executive director, ICICI Bank, has been appointed MD & CEO of ICICI Prudential Life Insurance Company. He replaces Shikha Sharma, who is going as the MD & CEO of Axis Bank. She is stepping down on April 30, 2009. Vaidyanathan will be replaced by Sandeep Bakhshi, MD & CEO, ICICI Lombard General Insurance Company (ICICI General). Bakshi is the new ED of ICICI Bank and he will be responsible for retail and rural banking. Bakshi, in turn, has been replaced by Bhargav Dasgupta, ED, ICICI Prudential Life Insurance. All these appointments would be effective May 1, 2009 and be subject to necessary approvals. Chanda Kochhar will take over as MD & CEO, ICICI Bank, from May 1. She has also been appointed non-executive chairperson of ICICI Life, ICICI General, ICICI Prudential Asset Management Company (ICICI AMC), ICICI Securities, ICICI Bank UK PLC and ICICI Bank Canada. She will assume charge after the bank's MD & CEO KV Kamath steps down on April 30, and assume office as non-executive chairman of the Board effective May 1, 2009. N Vaghul would retire as non-executive chairman of the bank as on April 30, 2009.

Source: VCCRICLE

BlueRun Raises Fund IV; To Increase Investments in India

BlueRun Ventures has raised its fourth fund of little more than $240 million, falling short of the $300 million target. VentureBeat reports that the fund plans to ramp up its operations in Asia by adding two more people in India and China. It also plans to increase the allocation to both these markets, the report adds. BlueRun, formerly known as Nokia Venture Partners, has an office in Mumbai. Sasha Mirchandani, a senior investment director with the VC firm, looks after its activities in the country. Earlier this year he told VCCircle that BlueRun is looking at investments in value-added services, telecom, media & entertainment, education and cleantech sectors. In another development, BlueRun has closed its office in Israel, citing the small size of the market. BlueRun's investments include PayPal. It has offices in US, Norway, China and Korea, besides India. The venture fund, Nokia Venture Partners, had made several investments in the country including Bangalore-based Sasken Communication Technologies.
BlueRun has cut its team by two and a half partners as one of its partners, Sujit Banerjee, is being shared with another VC firm in Element Partners. Banerjee will bring cleantech deals to Element, and semiconductor deals to BlueRun.

Source: VCCIRCLE

Tatas pick up 15% stake in Sydney firm

Tata Steel has picked up a 14.99 per cent stake in Sydney-based Riversdale Mining, which owns coal mines in South Africa and Mozambique. Tata Steel has steadily bought into Riversdale, listed on the Australian Stock Exchange, through its Singapore-based subsidiary Tata Steel Global Minerals Holdings. In a filing before the Australian Stock Exchange earlier this week, Tata Steel Global Mineral said it had acquired a 4.99 per cent stake in Riversdale through market purchases at an estimated investment of $41 million (Australian), or Rs 143 crore. When contacted, a spokesperson for Tata Steel declined to comment. The Singapore subsidiary of Tata Steel, the sixth largest player in the world in terms of steel making capacity, has been buying into Riversdale through market operations from September last year. By October, it had a stake of 10 per cent. Stock exchange data show it had spent $20.54 million (Australian), or about Rs 70 crore, in October to raise its stake from 7.29 per cent to 10 per cent. With the latest round of market purchases, the company has become one of the largest shareholders of Riversdale.
Passport Capital, Talbot Group and Merrill Lynch & Co are some of the other shareholders in the company. It is Tata Steel’s biggest ever investment in any mining company. The company had paid Rs 106 crore in October last year to acquire a 19.9 per cent share in Canada’s New Millennium Capital Corporation, an iron ore miner. Apart from the Benga coal mine in Mozambique, Riversdale has Zululand Anthracite Colliery in South Africa.
Tata Steel has been scouting for iron ore and coal to feed Corus’s operations in Europe.
Mozambique booty. Tata Steel’s association with Riversdale Mining dates back to August 2007 when it decided to acquire a 35 per cent stake in the Benga project. From then on, the Benga coal mine has increased its production and Tata Steel’s investment has reaped rich rewards.
Riversdale and Tata Steel plan to produce 20 million tonnes of hard coking coal from Benga, up from the initial 5.6 million tonnes. Apart from Riversdale and New Millennium, Tata Steel has an iron ore project in Ivory Coast and a limestone quarry in Oman. It also owns 5 per cent of Australia’s Carborough Down coal project in Central Queensland.

Source: The Telegraph

UTI AMC to divest 26 pc stake; open to acquisition

UTI Asset Management Company said on Saturday that it would divest 26 per cent stake to a strategic partner in the next three months but is open to acquisition of domestic fund house. "There are three shortlisted parties interested in taking stake and we hope to finalise this in the next three months," UTI AMC Chairman and Managing Director U K Sinha said here. Sinha declined to name the shortlisted bidders, but said the AMC would induct those that offered UTI a greater global footprint. "We have five and four-star rated offshore funds, but our size is very small. There are very large fund houses with much lower rating. We would like a partner those who could help us in overseas activities," Sinha said. State Bank of India, Punjab National Bank, Bank of Baroda and Life Insurance Corporation are the shareholders of UTI AMC holding 25 per cent each. Post divestment, all four investors would dilute stake proportionately to allot 26 per cent to the strategic partner. On acquisition, Sinha said the fund house is open if any offer comes and there are indications that a few AMCs were in trouble since mid 2008-09. UTI AMC has assets worth Rs 49,754 crore under management as on March 2009.

Source: Economic Times

Indiabulls to raise $600 mn for power projects

The QIP is expected to be a precursor to the IPO. Property developer Indiabulls Real Estate (IBREL) today said its board had approved a plan to raise $600 million (Rs 3,000 crore) through qualified institutional placement (QIP) of securities.

Investment banking sources said the company was expected to use the QIP proceeds to fund its power projects, mainly a 1,320-megawatt project planned in Amaravati in Maharashtra.
The QIP was expected to be a precursor to the initial public issue (IPO) being planned by the company, sources said.

The company had called an extraordinary general meeting on May 18 to seek shareholder nod, the company said in a statement to the Bombay Stock Exchange today. Gagan Banga, spokesperson for the Indiabulls group, said: “It is just an enabling provision to be able to raise equity or debt at an appropriate time. As management, we want to take shareholder approval to raise funds.”

Indiabulls Power Services had raised Rs 1,600 crore last year from LN Mittal and Farallon Capital by divesting 28.6 per cent equity to pursue its plans in the power sector. The company plans to build two mega thermal power plants in Maharashtra with an aggregate capacity of 3,960 Mw. It also has a memorandum of understanding with the government of Arunachal Pradesh to construct four medium-sized hydro electric projects in the state.

Indiabulls Power Generation Ltd (IPGL) has plans to set up a pit-head coal-fired Bhaiyathan thermal power project in Chhattisgarh. Indiabulls Power Services had won the bid for the 1,600 Mw Bhaiyathan project and a 350-million tonne coal block in Chhattisgarh, defeating ten leading power producers, including Reliance Power and Tata Power.

Source: Business Standard

IDBI Bank in talks with government for rights issue

IDBI Bank is in discussions with the Government to examine various fund raising options including a rights issue to fuel its expansion plans in the next two-three years, a top official of the bank said on Friday. "We have approached the Government to evaluate various options including a rights issue to meet the capital requirements in the next 2-3 years," IDBI Bank's Chief Financial Officer R K Bansal said. IDBI Bank's fund requirement over the next 2-3 years will be around Rs 7,000 crore, that would help the banking major to finance its growth plans including overseas expansion, Bansal said. The bank is also considering Tier-I and Tier-II routes to raise funds, Bansal said. Government owns nearly 53 per cent stake in the bank. IDBI Bank has targeted a loan growth of 20 per cent in the current fiscal. It has a capital adequacy ratio of 11.57 per cent.

Source: Economic Times

Vikram Pandit may have to leave Citigroup

US regulators who are concluding “stress tests” on banks may remove Citigroup Inc chief executive Vikram Pandit, the New York Post reported, citing sources it did not identify further. The regulators may have to take such a step to show the government is taking as strong a stand on banks as it did with General Motors Corp when it removed Rick Wagoner, the paper said. Citigroup finance director Ned Kelly told the paper in an interview: “Replacing (Pandit) would be dramatically destabilizing both for Citi and the system”. “Our recent quarterly results reveal the underlying strength of the franchise and Vikram Pandit’s strategy at work to restore Citi to profitability,” a Citigroup spokeswoman told the paper. A Citigroup spokesman in Hong Kong declined to comment on the report. US Treasury Secretary Timothy Geithner’s visit to Citigroup’s offices a week and a half ago was simply to conduct a check-up on the bank, the paper said, citing people familiar with the meeting. On Monday, the Financial Times website said that senior Federal Deposit Insurance Corp officials have privately discussed who might replace Pandit if the bank needed more government aid. Successors being discussed by FDIC officials included CFO Ned Kelly, Gary Crittenden, his predecessor and chairman of the division containing the New York company’s non-core assets, and one of Citi’s new board members, FT had said, citing people close to the situation.

Source: FT

PE firms allowing warrants to expire

Following the steep decline in the equity market in 2008, some private equity (PE) firms that had invested in companies through warrants are now left with no option but to let them expire because shares on the open market are cheaper than the exercise price of the warrants.
Warrants are securities that stakeholders use to purchase or increase equity in a company at a future date. An investor pays 10% of the value of the investment up front, and acquires the option of converting the warrants into shares any time within 18 months at a pre-decided price. This price is known as the exercise price.
A Mint analysis of data provided by Delhi-based investment banking outfit SMC Capital Ltd shows that there are at least 13 companies in the National Stock Exchange’s S&P CNX 500 index in which PE investors had warrants exercisable after 1 January 2007. The S&P CNX 500 represents about 95% of the total market capitalization of the stocks listed on the exchange. This index declined by 57.13% in 2008.
In at least six firms, warrants have been allowed to expire by their PE investors. The six are Abhishek Industries Ltd, Anantraj Industries Ltd, KPIT Cummins Infosystem Ltd, Nagarjuna Construction Co. Ltd, RSWM Ltd and S Kumars Nationwide Ltd. These warrants, if converted into shares before they expired, would have been worth Rs550.04 crore.
For RSWM Ltd, the expiry date of the warrants issued to New Vernon Bharat Ltd, an investment vehicle of New Jersey-based private equity and hedge fund New Vernon Capital Llc, was 29 May 2007. This could mean that the conversion did not happen because of some reason other than the market fall, which began only around January 2008. For the other five, the expiry date was either late last year or early this year.
Investors have fully converted their warrants into shares in only two companies—KS Oils Ltd and Oracle Financial Services Software Ltd.
Warrants issued to PE investors in at least five other companies are yet to expire and haven’t been fully converted. These firms are Everonn Systems India Ltd, Havells India Ltd, Shriram City Union Finance Ltd, SpiceJet Ltd and Uflex Ltd. The collective value of these warrants, if converted, works out to Rs377.93 crore.
The expiry date for Shriram City Union Finance’s warrants, originally set for mid-May, has been extended by six months. The investors are Bessemer Venture Partners, Asiabridge Fund I Llc, ICICI Venture Funds Management Co. Ltd and ChrysCapital. On whether it would convert in that time, senior managing director of ChrysCapital Ashish Dhawan said in an email: “We don’t need to decide for six months.”
“There is little likelihood of these getting converted for the reason that all these warrants are out-of-money or the current share price in all these cases is at a discount of between 17% and 77% to the exercise price,” said Jagannadham Thunuguntla, head of equity at SMC Capital.
In February 2009, the capital markets regulator Securities and Exchange Board of India changed the rules for warrant-conversion, saying that in forthcoming warrant issues, the holder would need to pay 25% up front. All the companies reviewed by SMC Capital had issued their warrants before February 2009.
However, at Rs1,251 crore, the conversion value of warrants issued to PE investors and exercisable after 1 January 2007 is minuscule compared with those for promoters.
Mint had reported on 15 April that out of warrants worth Rs25,153.04 crore issued to promoters of 34 companies, only Rs3,886.41 crore worth had been converted to equity. This was because the warrants were out of money, meaning that the share price of these companies was at a steep discount of anywhere between 15% and 86% to the exercise price of the warrants issued to promoters.
Source: Livemint

Government to replace AI-IA CMD Raghu Menon

In a surprise move, the government has started the hunt for a new Air India -Indian Airlines CMD to replace Raghu Menon, the current CMD, who has still two years to go. Menon, an IAS officer of 1974 batch, was appointed CMD last April.Cabinet secretary K M Chandrasekhar is scheduled to have a meeting of search committee with heads of other ministries on Friday to finalise the chairman of Airport Economic Regulatory Authority (AERA) and now finding Menon's successor has also been added to this meeting's agenda.The move to begin search for a new AI CMD has been kept secret as the mega airline is struggling to get over merger issues, especially with distrust running deep between former AI and IA employees. "The merger has been only on paper. At a time like this, the news that the government is trying to get a new head for AI would just send a message to worried employees that the owner (the state) is struggling to find someone to run the airline," said sources.Aviation secretary M M Nambiar will also attend Friday's meeting with the cabinet secretary. According to sources, Menon might be appointed head of AERA. While he had applied for the post first time round, the government had called for applications for the post again and that time he did not reapply.

Source: Times of India

Origo Sino-India invests $5m in risk management solutions business

Origo Sino-India (OSI), a London Stock Exchange-listed, Beijing-based private equity and consultancy firm, has made a follow-on investment of $5m in IGH, an international provider of risk management solutions. The deal was made in conjunction with a subsidiary of the firm, Origo Resource Partners (ORP).

IGH, which completed its first full year of operation in 2008, produces risk management products and services for the public sector and mining, power, construction and manufacturing industries. The company comprises a network of 15 subsidiaries across five continents, including operations in China. The investment will initially be in the form of new convertible loan stock to be issued by IGH, which will be split between OSI and ORP on a 30:70 basis, in accordance with their shareholding in IGH. Assuming the loan stock is converted, the $1.5m investment by OSI will result in its equity interest increasing to a maximum of 19.2 per cent. The capital will be used to fund a proposed acquisition by IGH and to complete another, both within the next month. The acquisitions will provide scope for expanding IGH's operations in Asia Pacific, South America and the Middle East. Chris Rynning, CEO of OSI, said, "I am delighted that Origo has been able to play such an important role in the development of IGH. This transaction provides IGH with significant growth opportunities and underlines how our strategy of investing and working with promising companies, in our chosen sectors, can deliver value to shareholders." OSI is a private equity investor and strategic consultancy business focusing on core economic growth opportunities in China and India. Last year the firm made a £3m deal with global investment manager GLG Partners to provide research on investment opportunities in the Chinese and Indian markets.

Source: AltAssets

Inbound merger and acquisitions set to increase: Assocham

Strong financials of domestic companies and robust demand in sectors like telecom, pharma and capital goods will kickstart inbound merger and acquisition (M&A) activities in India in the next six to nine months, an industry lobby report said Thursday. The report by the Associated Chambers of Commerce and Industry (Assocham) said: 'Inbound M&As, which had witnessed a steep fall of 85 percent due to the global financial crisis, and consolidation deals are expected to show signs of revival by October-December period 2009.' Assocham president Sajjan Jindal said in the report: 'Indian companies could attract greater number of inbound M&A deals as the equity valuations of certain sectors like telecom, pharma, and capital goods offer lucrative strategic option to bigger foreign companies.' In January-March 2009, the inbound M&A deals, which had the maximum share in total M&A deal size during October-December 2008, contracted by a whopping 85.28 percent. The outbound M&A deals shrunk 48.62 percent as the number of deals declined from 28 in October-December 2008 to 16 in January-March 2009, the report said. The aggregate M&A deals size plunged more than 70 percent in the first quarter of 2009. The number of deals also declined from 58 to 45 during the period. The Study also found that if it was the telecom sector that attracted the maximum share in the M&A deals in the last quarter of 2008, the pharmaceutical and IT sectors dominated the corporate M&A activities in the first three months of 2009.

Source: Reuters

India Inc's March deal value at $2.27 bn - Grant Thornton

Merger and acquisition deals' volume of India Inc soared about nine fold to $2.27 billion in March over the previous month, the first upsurge in about a year on monthly basis, on a large number of consolidation and reorganisation activities. The total number of M&A and group restructuring deals for March 2009 stood at 21 with an announced value of $2.27 billion, a nine-fold jump from that in February, global consultancy firm Grant Thornton said in the issue of Dealtracker. The volume of M&A deal in February 2009 stood at around $250 million. "One of the key reasons for the surge in deal values is an increase in the announced value of consolidation and reorganisation activities, in addition to a more positive outlook towards strategic acquisitions. "We expect the consolidation initiatives to increase in future," Grant Thornton Specialist Advisory Services Partner C G Srividya said. During March, there were 11 domestic deals where both acquirer and target company were Indian with an announced value of $86.89 million and eight cross-border deals with an announced value of $296.67 million.

Source: Economic Times

PEOPLESanjay Modi To Head Monster India, Sanjay Trehan To Join MSN

Digital media witnessed two key appointments. Sanjay Trehan, former NDTV Convergence CEO will be joining Microsoft to head MSN. Trehan will report to Microsoft MD Hemant Sachdev. The MSN position has been vacant since Country Manager (India) Jaspreet Bindra took over as head of Microsoft’s Entertainment and Devices segment from Mohit Anand. Meanwhile, Monster, a leading global online careers and recruitment resource and flagship brand of Monster Worldwide, has elevanted India sales head, Sanjay Modi to managing director for India, the Middle-East and South-East Asia. His appointment is with immediate effect, a press release said today. Prior to this assignment, Modi was the company's head of sales in India. "We are already a leading player in the Indian, Middle-Eastern and South-East Asian markets, with significant opportunity to grow. I am absolutely delighted to be assigned this responsibility," Modi said.
Before joining Monster in 2001, Modi served at indiaconstruction.com as the general manager of operations, and in business roles at NIIT Ltd and Ingersoll Rand India, the release added.
Source: VCCIRCLE

Nomura to start proprietary trading in India

Japanese financial services giant Nomura, which acquired Lehman Bros’ European, Middle Eastern and Asian operations including India last year, is entering proprietary trading business in the country. Nomura Financial Advisory & Securities (India) Pvt Ltd, a wholly owned arm of Nomura Holdings, is getting into the new business. The firm is already registered with SEBI as a merchant banker and with BSE and NSE as a stock broker. It entered the big league in I-banking when it got involved in one of the marquee deals of 2008 where Daiichi Sankyo acquired the country’s largest drug maker Ranbaxy. Nomura had earlier advised another Japanese firm Mitsui in selling its stake in Sesa Goa to Sterlite and also formed a part of the consortium that helped Sterlite to raise $1.2 billion ADS two years ago. The significance of Nomura’s rise can be fathomed by the fact that in 2007, it was not even among the top 20 investment banks operating in India. Besides the merchant banking and broking activities, Nomura also has three separate units -- Nomura Services India Pvt Ltd which is into business and technology process outsourcing, Nomura Fin Services (India) Pvt Ltd conducting investment and securities research for overseas clients, Nomura Structured Finance Services Pvt Ltd set up last year to get engaged in investment advisory services. Nomura has now applied to the foreign investment promotion board (FIPB) to expand into proprietary trading business. This would mean Nomura will get into actively trading stocks, bonds, options, commodities, derivatives or other financial instruments with its own money as opposed to its customers' money, to make a profit for itself. This could mean inflow of money into the firm from the parent.

Source: VCCIRCLE

Fidelity reduces stake in Satyam Computer to 6.47 pc

Foreign fund house Fidelity has offloaded 12 crore shares of the beleaguered IT firm Satyam Computer through open market transactions. In a disclosure on the National Stock Exchange, Satyam said Fidelity through its direct and indirect arms sold 12 crore shares representing 1.78 per cent stake of the company. Post sale, foreign fund Fidelity now holds 6.47 per cent stake in the company that is over 4.35 crore shares of Satyam Computer. The transaction was worth Rs 54.24 crore as calculated on the basis of Satyam's closing market price on April 6 (the date of sale). At the end of March quarter, Fidelity through its arms -- the Fidelity Diversified International Fund and the Fid Funds (Mauritius) Ltd -- held 8.71 per cent stake in the company. Yesterday, IT firm Tech Mahindra has said its Rs 1,154.66- crore open offer for an additional 20 per cent stake at Rs 58 a share in Satyam Computer would begin on June 12 and close on July 1, 2009. Tech Mahindra has proposed to the additional 20 per cent in Satyam at Rs 58 per share. Tech Mahindra is set to acquire 31 per cent stake in Satyam Computer Services at a price of Rs 58 a share. Pursuant to successful completion of the open offer, Tech Mahindra's holding in Satyam would go up to 51 per cent. Last week, Tech Mahindra had outbid others in the race to acquire a controlling stake in tainted Satyam.

Laxey faces set back in Hirco board ouster

Laxey Partners, an activist hedge fund, has received a set back in its attempt to oust the existing management of Alternative Investment Market (AIM) listed Hirco Plc after UK's Standard Life Investments opposed the move.

Standard Life, which owns 13.7 per cent in Hirco, the investment vehicle of Mumbai-based Hiranandani family, has said that Laxey's move to destabilise the existing management will harm the interest of the shareholders and hurt returns of the fund. ''We are concerned that such changes would lead to potential conflict in the joint ventures between Hirco, Hiranandani and the investment companies which manage the development projects, and would ultimately lead to diminution of value for Hirco shareholders,'' Standard Life Investments, said in a statement.
An extraordinary generalbody meeting is scheduled to be held on May 6 to resolve the dispute between Hirco management and warring shareholders. Laxey, which holds over 10 per cent stake in Hirco, on February 20 called for an EGM to oust three directors of Hirco including chairman Niranjan Hiranandani and replacing them with its own while Hiranandani camp, which owns a majority stake, has threatened to pull out the entire board if any of its directors are ousted. Laxey also demanded that Hirco name a chairman who was independent of the Hiranandani family. Standard Life in its statement said that a merger between Hiranandanis and Hirco on revised commercial and corporate governance terms remains the best way forward to enhance shareholder value. "We were concerned that the previous merger proposal was dilutive for existing shareholders and believed the payment by Hirco for a new exclusivity agreement with Hiranandani, which we estimated as amounting to £100 million consideration, was excessive and not supported by a fully independent valuation,'' it said in the statement.

History of the case

In December last year, Hirco proposed a reverse merger of Hiranandani realty projects with itself to become a integrated development company from a investment company, by taking direct control over the Hiranandani projects in Panvel and Chennai where it had invested.
Hirco was forced to abandon its plans following a backlash among investors led by Laxey which described the proposal as "shocking and ill-conceived". Hirco claimed support of 90 per cent of the shareholders for the move. After Hirco’s board approved the merger of the two development companies of the Hiranandani group, Laxey came out with a letter that said: “No valuations for the loss-making developer, Hirco Developments, have been provided, only accounts that show it has lost money every year and has required a cash injection every year from Hiranandani.”

Source: Business Standard

GE Hitachi in talks with L&T for nuke plans

GE Hitachi Nuclear Energy (GEH) is in talks with Larsen & Toubro (L&T) to engage the engineering and construction firm as a potential vendor for its nuclear power plants in India. GEH had, late last month, announced a tie-up with state-owned equipment manufacturer Bharat Heavy Electricals Ltd (BHEL) for reactor manufacture. “We are in talks with L&T as well. The idea is to develop a supplier base in India for projects based on GEH’s Advanced Boiling Water Reactors (ABWR),” the Chief Executive Officer for GE Energy India, Bangladesh and Sri Lanka, Mr Kishore Jayaraman, said. GEH had, on March 23, announced the signing of two agreements with the Nuclear Power Corporation of India (NPCIL) and Bharat Heavy Electricals Ltd (BHEL) as the companies prepare to collaborate on building multiple GEH-designed nuclear reactors. Under the preliminary agreements, GEH will begin planning with NPCIL and BHEL for the necessary resources in manufacturing and construction management for a potential multiple-unit Advanced Boiling Water Reactor (ABWR) nuclear power station. According to GEH, its 1,350-MW ABWR technology is “the world’s only commercially proven Generation III reactor design”, with the first two of four units entering service in 1996 and 1997 and four additional units under construction currently. In the nuclear space, L&T has taken a first mover advantage and aggressively tied-up with a bevy of partners for reactor manufacture in the last couple of months. L&T has in place a preliminary agreement with Russia’s ZAO Atomstroyexport for manufacturing the ‘VVER series’ reactors.

Source: Business Line

BankAm Merrill India head & team join JP Morgan Chase

It could be one of the largest job shifts in recent times. Bank of America Merrill Lynch India head of global markets Kaku Nakhate and five of her team members are reliably learnt to have put in their papers at Merrill and joined the equities team of rival firm JP Morgan Chase in India. Ms Nakhate, one of the few top women to be heading a markets job in India, had only last month been named head of global markets at Merrill, after the integration with BoA. Although, it isn’t clear as to what Ms Nakhate and her team left, persons in the know told ET that senior officials at Bank of America Merrill Lynch tried hard to negotiate and persuade the team to stay back. The team consists of members from equity sales, trading, structured products and the fixed income team, which could greatly boost functions at JP Morgan. Both DSP Merrill Lynch and JP Morgan Chase refused to comment on the issue. Ms Nakhate is the head of global markets for India, responsible for equity sales, trading and fixed income. The other five members are Sachin Parekh, Avinash Gupta, Manish Prasad, Aditya Khansaheb and Manish Tawde. Ms Nakhate was earlier managing director and co-head, institutional equities, at the erstwhile DSP Merrill Lynch. Ms Nakhate, a management graduate from NMIMS 1988, started her career with DSP Merrill Lynch, as part of the research team and rose to the current rank. Sachin Parekh was part of the equity sales team and is based in Singapore. Avinash Gupta, Manish Prasad, Manish Tawde and Aditya Khansaheb are part of the equity sales and structured products team in India.

Source: Economic Times

P-Note investors step up their activities in equity markets

Recent bulk deal information (over the past one week) released by Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) reveals that P-Note players have stepped-up their activities in the equity markets. CLSA (Mauritius) and Deutsche Securities (Mauritius) were the major buyers in the street cumulatively investing more than Rs1.3 bn in Indian equities. Some of their major investments include

(1) Unitech – CLSA (Mauritius) bought Unitech stock worth Rs883 mn after the real estate company concluded its QIP issue—abating concerns on its bankruptcy
(2) Sintex Industries - CLSA (Mauritius) bought Sintex stock worth Rs100 mn
(3) Eicher Motors – Deutsche Securities (Mauritius) bought Eicher Motors stock worth Rs200 mn
(4) Jubilant Organosys - Deutsche Securities (Mauritius) bought JOL stock worth Rs122 mn

Morgan Stanley and Merill Lynch together divested stocks worth Rs0.6 bn. Some of their major divestments include

(1) Gruh Finance – ML (Espana SV) sold Gruh Finance stock worth Rs135 mn
(2) Morgan Stanley (Dean whiter) sold stocks of (a) Educomp – Rs256 mn, (b) Karuturi Global – Rs87 mn, (c) Bajaj Hindustan - Rs82 mn and (d) Ziacom – Rs40 mn.

What are P-Notes?

Participatory notes (PNs / P-Notes) are instruments used by investors or hedge funds that are not registered with the SEBI (Securities & Exchange Board of India) to invest in Indian securities. Participatory notes are instruments that derive their value from an underlying financial instrument such as an equity share and, hence, the word, 'derivative instruments'. SEBI permitted FIIs to register and participate in the indian stock market in 1992.

Indian based brokerages buy Indian-based securities and then issue PNs to foreign investors. Any dividends or capital gains collected from the underlying securities go back to the investors.
Participatory notes are instruments used for making investments in the stock markets. However, they are not used within the country. They are used outside India for making investments in shares listed in that country. That is why they are also called offshore derivative instruments.
In the Indian context, foreign institutional investors (FIIs) and their sub-accounts mostly use these instruments for facilitating the participation of their overseas clients, who are not interested in participating directly in the Indian stock market. For example, Indian-based brokerages buy India-based securities and then issue participatory notes to foreign investors. Any dividends or capital gains collected from the underlying securities go back to the investors. According to an expert group constituted by the finance ministry in India, in August 2004, participatory notes constituted about 46 per cent of the cumulative net investments in equities by FIIs

Source: Exchanges, Team M&A

VenturEast raising eighth fund; To focus on Non-Metros

Venture capital investor VenturEast has started raising its eighth fund, VenturEast Life Fund III LLC, focusing on high-growth small and medium enterprises (SMEs). The fund has applied to World Bank's private equity arm International Finance Corporation (IFC) for commitments of upto 20% of the total commitments raised. The target size of the fund is not known.
When VCCircle contacted Sarath Naru, the founder and managing partner of VenturEast, he said target size is still under discussion. On being asked to comment on this development, he quipped that there is no "development" till the first close is done.

IFC was also an investor in $150 million VenturEast Proactive fund. The two organizations also recently came together with Bharatiya Yuva Shakti Trust to launch $5 million microequity fund, to provide equity-like support to small and disadvantaged entrepreneurs.
Interestingly, VenturEast Life Fund is looking at mezzanine investments besides equity and equity-related investments. The fund will also focus on investments outside main Indian metros, which is Tier II, Tier III cities and rural India. The new fund will look at areas like healthcare delivery, pharma related companies, food & agriculture and cleantech.
The new fund will be managed by VenturEast Mauritius Investment Advisors and APIDC Venture Capital Private Limited. APIDC VC was started as a joint venture between Dynam Ventureast Private Ltd, which held a 51% stake and Andhra Pradesh Industrial Development Corp. Ltd (APIDC), which held the remaining stake. The fund was later privatized with APIDC holding only 1% stake.

The fund will also raise monies from domestic institutions simultaneously in a different entity. VenturEast, one of the oldest fund managers in the country, has raised capital from investors like UK-government backed fund-of-funds CDC, US-based Argonaut Private Equity, Saudi Economic and Development Co., Life Insurance Corp. of India (LIC) and internet giant Google for its earlier funds.

Several private and venture capital funds are looking at investing in rural economy. This area is a relatively underserved segment of the market and is witnessing an increasing growth in demand for goods and consumer products. Till now PE & VC funds in India have mainly focused on opportunities serving urban spending.

Many of the recent private equity deals have been in rural segment, especially in food and agriculture based firms. Zephyr Peacock, which raising its second fund targeting $75 million, is also looking at this area.

Source: VCCIRCLE

Everest Kanto acquires majority stake in CC&L

Everest Kanto Cylinder Ltd (EKC), leading player in high-pressure gas cylinders, has informed BSE and NSE that the Company has acquired majority stake (72.65%) in Calcutta Compressions & Liquefaction Engineering Pvt. Ltd ("CC&L") for a consideration of Rs. 2.4 crore.

CC&L is in the business of purchase and sale of natural gas and has an existing agreement with Oil & Natural Gas Corporation Ltd ("ONGC") for sourcing methane gas from the latter’s coal bed methane project at Parbatpur near Jharia in Jharkhand.

EKC will be initially involved in supply of the gas to industrial customers in and around Dhanbad and Bokaro and at a later stage, there is a potential for city gas distribution to fuel auto rickshaws and commercial vehicles in the eastern region. It will transport gas to industries using cascades and jumbo cylinders. Going forward, the company is also planning to set up pipelines for supply of the gas once gas offtake increases significantly.

Commenting on the occasion Mr. Prem Khurana, CMD, Everest Kanto Cylinder Limited said: “With the growing demand for CNG in various parts of the country including for industrial use, this acquisition will prove beneficial and offer perfect synergy to EKC’s business.”

Lazard seeks FIPB nod to launch Venture Cap fund in India

Lazard Group is learnt to have seeking Foreign Investment Promotion Board (FIPB) nod to launch Venture Capital fund in India. Lazard will start Lazard India Growth Fund based out of Mauritius and will invest USD 25 million as part of sponsor commitment. The Fund primarily is looking to invest into mid market companies especially in infrastructure and some of the other growth areas.Lazard Group will also approach IL&FS to act as trustee to the fund.
On similar lines, Nomura is also seeking FIPB nod to start proprietary trading in India.

Source: CNBC

ISS Facility Services acquires Godrej HiCare

ISS Facility Services India Pvt. Ltd. (ISS) has announced acquisition of Godrej HiCare Ltd. (GHCL), a subsidiary of Godrej Industries. Godrej HiCare is the leading service provider for pest control services in India and its acquisition grants ISS access to an extensive network and franchise base built by the Godrej HiCare across 18 cities. With this acquisition, Godrej HiCare will become a wholly owned subsidiary of ISS and will be integrated into the ISS brand. Commenting on the acquisition, Mr. Jolly Kochery, Country Manager, ISS Facility Services India Pvt Ltd. said, “We are pleased to announce the acquisition of Godrej HiCare as it is a strategic fit to our existing service portfolio. This acquisition will not only help us to fortify our presence in the Facility Service industry but will also help realize our vision of becoming the number one player in this segment. Despite the economic downturn, we feel that the Godrej HiCare business model has great intrinsic strength and will help us achieve our strategic objectives. Our international standards, global best practices and excellence in service delivery will ensure that
we are well geared to meet the expectations of current and potential clients alike.” Speaking on the occasion, Mr. A Mahendran, Director, Godrej HiCare Limited, “We have used our entrepreneurial spirit and sound management practices to successfully build the Godrej HiCare business in a short span of time. However, as a group we feel that for the business to realize its optimal potential, it needs to be scaled up by a player who has in-depth understanding of the sector. We believe that ISS, with its successful track record and presence across 50 companies globally, is poised to take this business to new heights in India.” ISS is one of the world’s largest facility services provider and provides complete end-to-end solutions across cleaning and housekeeping, office support, catering, property and pest control services as well as integrated facility services.

Adani Power files for IPO; 3i's Investment in positive zone

Adani Power, a part of Gautam Adani-led business conglomerate with interests spanning from FMCG to infrastructure, has approached the market regulator SEBI with a revised IPO plan, estimated to raise more than Rs 2,000 crore. This is the second time Adani Power is planning to come out with an initial public offer (IPO), as its previous attempt was scuttled due to adverse market conditions. In its revised draft prospectus filed with SEBI, Adani Power has proposed to sell over 330 million equity shares of Rs 10 face value each, which would account for about 15% of the company's post-issue equity capital. While the price of the shares to be offered in IPO would be decided later, the company has said in the draft prospectus that it expects to utilise Rs 2,193 crore of net proceeds from the public issue to fund its power projects - Mundra IV in Gujarat and Tiroda in Maharashtra.

What about 3i's investment?

With this development, it is now confirmed that UK-based 3i’s investment in Adani Power remains in the positive zone. The average cost of acquisition for 3i is pegged at Rs 59.5/share. Adani Power seeks to raise Rs 2,193 crore through the issue which would translate into per share price of around Rs 65-70 given that the issue comprises 33.05 crore shares including 80 lakh shares reserved for the employees. Though 3i would be sitting on profit at this valuation, looking at the opportunity cost of the fund(had it been invested in some debt instrument) it could have earned a higher return.

Earlier, the private equity fund had invested Rs 900 crore in Adani Power in two tranches-- October 2007 and April 2008. The PE firm subscribed to 8.4 crore shares as a result of these two transactions which now stands at 15.14 crore shares due to a 4:5 bonus issue at Adani Power last year. 3i holds 8.22% stake in Adani Power before the IPO which would become 6.92% post issue.

Source: Business Standard, VCCIRCLE

SafeNet India Takes Over Aladdin India Operations

SafeNet, a global provider of information security, has established common management for Aladdin Knowledge Systems and SafeNet. This comes as a result of Aladdin's acquisition by Vector Capital, SafeNet's private equity owner. With this, the Indian operations of both the companies will now be looked after by Rana Gupta, Business Head, India & SAARC, SafeNet. Aladdin is expected to be fully integrated into SafeNet in the future. "This acquisition has brought in great opportunities for the customers as well as the channel partners. With this acquisition, SafeNet has become the clear leader in the rights management and enterprise data protection solutions space," informed Gupta.

Source: Channel Times

StanChart eyes Mideast and Africa Private Equity deals

Standard Chartered bank is bidding for private equity deals in Asia, the Middle East and Africa after an 18-month hiatus as it looks to benefit from higher yields in the aftermath of the financial crisis. The bank's Middle East & North Africa Managing Director and regional head of private equity Hossam Shobokshi told Reuters it was focusing on areas including real estate and infrastructure mainly in Asia and the Middle East. "We are active, but we are disciplined, and we are putting in bids," Shobokshi said on the sidelines of a conference in Abu Dhabi on Tuesday. "Deals done in the next two years will yield high returns." Stock markets in the Middle East and North Africa have been hard hit by global turmoil and valuations have dropped. Private equity funds in the region have $11 billion (7.54 billion pounds) to invest after raising a record $6.4 billion in 2008, the Gulf Venture Capital Association said. The bank, which is managing a fund with India's Infrastructure Leasing and Financial Services, is looking at companies with at least three years of operation and minimum profits of $5 million, Shobokshi said. "Over the last one and a half years, we have not invested in a single deal," he said. "We looked at 180 deals, (but) did not invest to avoid the speculative valuations in the market. We are here to produce returns." Standard Chartered has 60 percent of its business in Asia, 20 percent in the Middle East and the rest in Africa, Shobokshi said. "Emerging markets are important for us," he said.
Source: Reuters

Piramal Health eyes acquisitions in US, Europe

Piramal Healthcare Ltd is looking for acquisitions in the US and Europe, a senior official said, adding that business should grow during the current fiscal year at about the same pace it did in 2008-09.
Piramal recently acquired US-based inhalation anaesthetics maker Minrad International Inc to boost its presence in the global critical care business and director Swati Piramal said they were looking for more.
“We expect to buy 2-3 companies in advanced markets like the US and Europe,” she told reporters on the sidelines of a conference.
Piramal Healthcare reports results for its fourth quarter ended March on Friday.
Piramal Healthcare and a related firm Piramal Life Sciences Ltd would together invest about Rs1 billion during the 12 months to March 2010, mostly on new drug development and research, she said.
The company is in the process of phase II trials of a cancer drug and expect to get approvals in the US, Australian and Indian market this year, Swati Piramal said, adding 14 new drugs were in the pipeline.
The firm plans to add 300-400 professionals in the super-speciality marketing division, she added, ruling out any plan to sell stake in Piramal Healthcare or Piramal Life Sciences Ltd.
Piramal Healthcare employs about 7,000 employees in total, she said.
Shares in Piramal Healthcare closed 0.1% higher at Rs211.05 in a Mumbai market that ended 0.74% down, while Piramal Life Sciences shares fell 1.9% to Rs48 rupees.

Source: Mint

Blackstone Advisors exits small-cap stocks

US-based Blackstone Advisors, a leading foreign institutional investor (FII), is exiting some of its small-cap stocks in India, including more than half of its stake in Indo Tech Transformers. Blackstone is selling the stakes in these companies through its Asia and India funds. A senior executive of Blackstone Group said the company has decided to sell stakes to raise cash for various distributions. “Also, we might find other, more attractive names that we need to rotate into. Some sales can also be due to company-specific reasons,” the official said.It is not known whether Blackstone is making profit from the sales, though it is clear that share prices of all these companies have come down significantly in the past one year.In the case of Indo Tech Transformers, the US fund house had bought 86,871 shares on October 27 at Rs 169.90 a share. It has sold nearly three lakh shares in the company in three transactions at an average price of about Rs 302 a share.“The total cost of investment may be higher. The buying seen in October may have been to average the cost,” said a stockbroker. At present, shares of Indo Tech Transformers is about 34 per cent down from their one-year high of Rs 590 in April last year.Prices of Blackstone’s other small-cap holdings have also come down. HBL Power Systems is down to Rs 132 a share from Rs 330 in May last year. Blackstone has liquidated 3.27 lakh shares of the company.In the quarter ended December 31, 2008, Blackstone held 2.72 per cent equity stake (6,60,000 shares) in HBL Power Systems. Blackstone’s name, however, does not figure on the shareholders’ list for the March 31, 2009 ended quarter, indicating that the fund house’s stake has come down to less than 1 per cent.In Sujana Tower, Blackstone, through the India Fund, held 6.20 per cent stake (2,570,767 shares) at the end of December quarter. Last month, the company sold a part of the stake at a paltry Rs 8.44 per share, against the 52-week high of Rs 132.70 on April 22 last year. Octav Investments is another stock from which Blackstone has partially exited. In the October quarter, the fund held 1.56 per cent stake (46,997 shares) in the company, which has now come down to less than one per cent. Share price of the company is at present quoting at Rs 13.32 compared with Rs 650 on August 8 last year. “Our strategy has not changed. We have more exposure to large-cap names and keep some exposure to mid and small-cap names that we believe have the most potential,” the Blackstone official said. Blackstone India Fund’s top 10 holdings at the end of March 31, 2009 include Reliance Industries, Infosys Technologies, Bharti Airtel, Hindustan Unilever, ITC, HDFC, ONGC, BHEL, HDFC Bank and State Bank of India.

Source: Business Standard, Team M&A

HDFC fund eyes investment in Puravankara unit

HDFC’s real estate fund is understood to be in advanced stages of investing around Rs 200 crore in a low-cost housing project being developed by the Bangalore-based Puravankara Projects. Puravankara Projects is executing the low cost housing project through a wholly-owned subsidiary Provident Housing & Infrastructure, set up last year. Investment banking sources indicate that HDFC is carrying out a due diligence of the project and the investment is likely to be funnelled into a special purpose vehicle floated by Provident for a 4,500 flats project in Bangalore. Provident is expected to launch the first phase of the project this quarter. The company is rolling out its Bangalore project after a relatively decent success it met with its low-cost housing project in Chennai. The company was able to sell close to 700 flats within a week of its launch. With these two projects, Provident is expected to roll out 6,000 houses in Bangalore and Chennai.Provident Housing during August 2008 had envisaged an investment of Rs 8,000 crore over five years and company officials maintained they are not going slow on the project. Provident is also looking to enter Mysore and Kochi markets at a later stage and is looking to acquire 200 acres for the expansion at a cost of around Rs 2-3 crore per acre.The company already has 70 acres and is looking at a total land bank of 550 acres in all for the project which will see the roll-out of close to 65,000 homes sized 750-1,000 sq feet. The houses will be priced between Rs 12 lakh and Rs 20 lakh.

Morningstar starts India operations

Morningstar Inc, an independent investment research company, said it has started its India operations as part of a plan to expand business in Asia. The Chicago, Illinois-based company operates in more than 20 countries and has offices in Taiwan, Singapore, China, Malaysia and Hong Kong Special Administrative region. The Indian office also controls business interest in the Middle-East region. Morningstar has hired Aditya Agarwal as managing director to run its India operation. Agarwal was one of the founders of MutualFundsIndia.com, which was later acquired by rating company ICRA. “For the first two years the focus is to create a brand and establish ourselves as an independent research organisation,'' Agarwal said. The company has already hired half-a-dozen people to track key segments and is expected to ramp up manpower after it finalises plans to offer stock ratings and related advisory services. The company already runs a data centre with 150 people, which it inherited from acquisition of Hemscott data, media, and investor relations Web site businesses from Ipreo Holdings LLC for $51.6 million in cash.
Morningstar, founded by chairman and chief executive, Joe Mansueto in 1984 from a one-bedroom Chicago apartment with an initial investment of $80,000 has made a name in rating mutual funds, hedge funds and stocks. The firm's star rating system for mutual funds is coveted by industry. Morningstar sold share in an initial public offering on May 2005. Mansueto owns about 57 per cent of the company. Morningstar's entry into India comes amid a global meltdown in stocks and growing risk averseness among investors towards equity. India's benchmark Sensitive index has declined more than 30 per cent in the past year. Reflecting the bearish sentiment investors have invested less in mutual fund schemes resulting in the average assets under management (AAUM) declining for the first time in five years. The AAUM of fund houses fell by 7 per cent or Rs 36,798 crore to Rs 4.93 lakh crore in the financial year 2008-09, as against Rs 5.30 lakh crore in 2007-08, according to data from the Association of Mutual Funds in India (Amfi). But Agarwal is unperturbed. ''In such times it is critical that investors know the quality of funds they have invested their money in.'' The mutual fund product that Morningstar is offering has also been tailored to suit the Indian requirement.

Source: Business Standard