Mergers and Acquisitions in India

Battery major Eveready is looking to acquire a minimum of an 80% stake in Uniross for US$13.65 million.

2009-05-14T18:05:00.001+05:30

Battery major Eveready Industries us getting ready for an acquisition. After reporting a profit for fiscal year 2009, the company has set its eye on French company Uniross SA. For this, the company has set up a special purpose vehicle (SPV) to acquire minimum of an 80% stake in Uniross for $13.65 million.
Uniross is into the business of manufacturing and distribution of rechargeable batteries and allied products. Eveready has signed a term sheet with Paris-based CG Holding for investment through SPV. The company plans to invest a total of $13.65 million or Euro 10 million in the deal through mix of debt and equity, it said in a filing to BSE. The deal closing is subject to certain conditions and approvals.
Indian equity markets have rallied by more than 20% since April, even though uncertainty over election results persists. Several companies have also filed for IPO. But are Indian companies now ready for overseas acquisitions?
Eveready's stock was up by nearly 5% closing at Rs 25.40 on a day when markets fell by 1.22%. The company has a market cap of Rs 185 crore.
Last month Eveready reported an after-tax profit of Rs 19.40 crore fiscal 2009 against a loss of Rs 19.32 crore in 2007-08. While battery contributes around 70% of the company’s turnover, it's also into lighting, packet tea and flashlight businesses. The company is promoted by Khaitan group.
Eveready recently launched recently launched 'Ultima' alkaline battery and 'HomeLight' LED cells, and is expecting revenues to double to rs 1600 crore in FY10. The company is now focusing more on alkaline batteries, CFLs, LEDs as it believes they have the highest growth potential.
In 2005, Eveready had acquired BPL Soft Energy System, the battery business of BPL, for Rs 67 crore. That acquisition had helped it consolidate its position in the Indian market. The company has a 56% market share in conventional battery market in India.

Source: vccircle

DLF promoters raise Rs3900 cr

2009-05-13T10:05:00.005+05:30

DLF promoters have sold 170 million shares at Rs230/share to raise Rs3900 cr. The process, which was being overseen by Deutsche Bank and JP Morgan, started late Tuesday evening and closed before the stock market opened.

Proceeds from the sale are expected to be invested in DLF Assets Ltd (DAL), the promoter-owned real estate trust, which is in the midst of restructuring. Of this, around Rs 2,100 crore will be used to pay hedge fund DE Shaw, which had invested $400 in 2007 through optionally convertible preference shares. The rest will be used to repay part of DAL’s Rs 5,400 crore debt to DLF Ltd.

After the transaction, the promoters’ stake will drop to 78.6 per cent from the current 88.5 per cent. Asked about the sale, DLF Vice-Chairman Rajiv Singh said, “I am not in a position to react because bankers are advising us on the issue.”

Meanwhile, in a separate transaction DLF is expected to acquire DAL for Rs 7,500 crore. This effectively means DAL will have to incur a loss of Rs 2,500 crore, since it acquired assets from DLF for Rs 10,000 crore in 2007-08.

Apart from DE Shaw, DAL raised $700 million from Symphony Capital through optionally convertible preference shares with a coupon rate of 4 to 6 per cent to fund the asset acquisition from DLF.

D E Shaw was assured of an exit route from DAL after a planned listing on the stock exchange in two years. That route has closed since the real estate market has crashed and is unlikely to see a revival of interest from equity investors in the near future.

Although the due diligence of DAL is complete, sources said the transaction would be concluded after DE Shaw is paid. DAL, after getting the fund infusion from promoters is expected to pay off DE Shaw so to conclude the transaction, sources said.

2i Capital Sells Part Stake in Titagarh Wagons To Hedge Fund

2009-05-03T02:11:00.002+05:30

Bangalore-based private equity fund 2i Capital has sold nearly half of its stake in railway freight wagon manufacturer Titagarh Wagons. The fund sold a 2.71% stake in Titagarh for a total sum of Rs 9.55 crore on Wednesday when Sensex reached a six month high. The shares weresold at a price of Rs 191 per share to hedge fund Indus Capital Advisors. At the time of listing, 2i Capital held a little more than a million shares. The PE fund's average stock acquisition price stands at Rs 191 per share, Vivek Sekhar, CEO of 2i Capital (India) Pvt. Ltd, told VCCircle in an email response. This means that 2i Capital has sold its stake exactly at par to its acquisition price. The private equity firm, which is currently raising its second fund of $200 million, still has a little more than 3% stake in the firm. Sekhar also said that 2i Capital's average sale price is higher as it sold some stake in a trade sale. Titagarh Wagons listed on April 2008 with a price band of Rs 540-610. The Kolkata-based firm also sold stake to GE Capital International and JPM Morgan Mauritius in a pre-IPO deal. It had reached a 52-week high of Rs 907 last year before slipping as markets melted. Titagarh Wagons had raised Rs 24.7 crore from 2i Capital in March 2006, by selling stake at a price of Rs 1711 per share. ChrysCapital also picked up a stake in the firm for around Rs 55 crore in 2006, buying stake both from the promoters and through fresh equity. The number of shares held by 2i Capital later increased due to a bonus issue in January 2007.
The stake has been sold by 2i Capital soon after one year lock-in period post listing has completed.

PE Funds Continue To Exit

Private equity funds continue to selectively pare their shareholding in various listed portfolio companies, making best of what is tipped to be a bull rally. The funds may also see this as good time to exit as markets are expected to see volatility post-elections, especially between 16 to 30 May, when the government is to be formed. Besides 2i Capital, IL&FS India Leverage Fund also sold a little more than 2% stake in IBN18 Broadcast, which operates general news channels CNN-IBN and IBN7. The stake has been sold for Rs 35.8 crore between September 2008 and April 2009, IBN18 said in a filing earlier this month. Last month Citigroup Venture Capital International sold nearly a 5% stake in Techno Electric & Engg Company and UK-based 3i Group also sold 1.42% stake in Mundra Port and Special Economic Zone Ltd. Earlier this month also IDFC Private Equity sold a small part of its stake inGujarat State Petronet Ltd via open market deals.

Source: VCCIRCLE

Eagle, Burgmann Merge Indian Businesses in a $70 Million Deal

2009-05-03T01:56:00.001+05:30

Germany based Burgmann Industries and Japan based Eagle Industry have merged their mechanical seals operations in India. The new entity will be called EagleBurgmann India Pvt. Ltd. The combined value of the transaction is approximately $70 million. Both Eagle and Burgmann are the makers of mechanical seals and sealing systems, which are used in various industries like power generation, oil and gas production and refinery & petrochemicals etc. Both the companies have been operating in India through separate entities and with different local partners. As part of its global integration strategy, Eagle and Burgmann decided to buyout both the local joint-venture partners and pool the resources of the separate entities into a single vehicle. Both the companies hold equal stakes in the newly formed entity. The combined value of the transaction was approximately $70 Million. The legal and operation integration as well as the negotiations with the local partners were facilitated by BMR Advisors. Besides enlarging the product base, the integration of the operations of the two companies is expected to provide better economic, operational, financial, technological and market synergies. Burgmann Group’s product range includes mechanical seals, gas lubricated seals, seal supply systems, magnetic couplings, stuffing box packings, static seals, automotive seals, rotary kiln sealing systems and expansion joints. The product portfolio of eagle Industry includes mechanical seals, valves, plant devices, marine products, bellows devices, and related installation work.

Source: VCCIRCLE

Pangea Capital To Invest $30M In Deepak Puri's Cobol Technologies

2009-05-03T01:53:00.003+05:30

Solar power firm Cobol Technologies (owned by Deepak and Ratul Puri of Moser Baer), has raised $30 million(Rs 151 crore) from Pangea Capital. Bermuda-based Pangea is a mid-sized fund house with total assets under management in excess of $100 million.
The investment in Cobol has been made through Pangea Emerging Infrastructure Fund, which targets both listed and unlisted Indian infrastructure companies. It invests in companies engaged in sectors such as energy, oil & gas, roads, ports and telecom. Besides this Pangea also has an emerging markets focused fund called Pangea Emerging Markets Fund and Pangea Alternative Fund. According to an application submitted to foreign investment promotion board(FIPB), the top government body which clears foreign investment into the country, Cobol has raised the funds through the issue of fully convertible debentures (FCDs) to Pangea in three tranches. The FCDs are compulsorily convertible into equity shares by March 31, 2012.
The agreement between the two firms say that the number of equity shares to be issued after conversion of the FCDs to Pangea shall not exceed 49% stake in Cobol. Moser Baer chairman and managing director Deepak Puri and executive director Ratul Puri own 50% each of the solar power firm. The firm, started in August 2007, operates in the area of electricity generation and distribution and is currently setting up a 5 mega-watt (MW) solar power project in Uttar Pradesh. This marks an expansion of business in the non-conventional power sector for Deepak Puri and Ratul Puri whose flagship company Moser Baer has also branched out in solar photovoltaic business. Moser Baer has outlined plans to invest $3.2 billion in the solar business and is also setting up a solar power project in Rajasthan, which is expected to become the largest grid-connected solar farm in India.

Source: VCCIRCLE

Siva In Talks To Pick Up Stake in Telco S Tel

2009-05-03T01:51:00.002+05:30

NRI businessman C Sivasankaran may just be planning a re-entry into India's rapidly growing telecommunications market. Economic Times reports that Sivasankaran is in talks to buy the stake of one of the private equity promoters who hold a 51% stake in S Tel, a Chennai-basedcompany holding license in six states. Sivasankaran, known as Siva, sold his stake in Aircel for $1.08 billion to Maxis Telecom in 2005. Earlier this year, S Tel sold a 49% stake to Gulf-based Bahrain Telecommunications Co and Millennium Private Equity for $225 million. S Tel has licenses to operate in 6 Indian states - Bihar, Orissa, Jammu & Kashmir, Himachal Pradesh, North East and Assam. The company can also provide broadband services across the country as it has a Category A ISP license. S Tel is promoted by Skycity Foundations and Mauritius-based Telecom Investments. The real identity of the investors of S Tel is not known. The directors of the company, as mentioned on the company website, are S Natarajan, Santhosh Robert and Padmavathy Suresh. Siva's re-entry come on the backdrop of the term of his non-compete agreement, which he had signed Maxis Telecom, ending in March this year. He was also barred from buying more than a 10% stake in an Indian telecom firm. In the meantime Siva bought a 8.6% stake in Tata Teleservices Rs 1,200 crore in 2006, which fell to to 6% after Japan's NTT DoCoMo bought 26% stake earlier this year. He is also said to have invested Rs 350-400 crore in Unitech Wireless. Siva has made fortunes buying, turning around and then selling Indian companies. His investment firm is known as Siva Ventures. Besides Aircel, he sold coffee chain Barista, which he bought over for Rs 65 crore (~$15 million) to Italian chain Lavazza for $125 million. Another one of his investments was Tamilnad Mercantile Bank.

Source: Economic Times

Modi Mundipharma Forms JV with Omega Pharma

2009-05-03T01:48:00.000+05:30

Delhi-based Modi Mundipharma has formed a 50:50 joint venture (JV) with Belgium-based company Omega Pharma to sell the latter’s over-the-counter (OTC) medicines in India and manufacture on-contract drugs for the Belgian company’s overseas markets. The two companies plan to launch 15 OTC medicines and eight medicines between October 2009 and April 2010. These include Omega’s best-selling medicines, Silence (anti-snoring), Cellasaene (anti-slimming) and Salvecol (cholesterol reducer), among others. The two companies would invest e2 million and hire 75 people in its sales team to sell the products in the market, which will be scaled up to around 200 in the next five years.

Source: Economic Times

Axious Investment to Pick 3.8% stake in QTIL

2009-05-03T01:43:00.001+05:30

Singapore-based Axious Investment is picking up 3.8% stake in standalone tower company Quippo Telecom Infrastructure (QTIL). The deal size is estimated at around Rs 200 crore. According to sources, Axious will buy out Delhi-based Premier Chemco’s 3.8% stake in QTIL, and this will involve a transaction between two private parties.

Source: Economic Times

Srini Vudayagiri Quits Lightspeed Venture Partners

2009-05-03T01:39:00.001+05:30

Sreenivasulu "Srini" Vudayagiri, an India based Venture Director with Lightspeed Venture Partners, is quitting the venture capital firm. When contacted, Vudayagiri said, "I will be transitioning out of Lightspeed by end of this month." He declined to comment on his next move, saying he will announce his plans at an appropriate time. "I will continue to be in the industry," Vudayagiri said. Vudyagiri joined Lightspeed in 2007 from Thomas Weisel International, where he was heading the India-focused fund of funds. Thomas Weisel's India fund was sold off to Guggenheim Partners last year. Lightspeed's India investments include Four Interactive (which runs local search firm AskLaila) and Tutorvista, an online tutorial business. Earlier this year Lightspeed appointed Bejul Somaia as Managing Director in India, a position which was held by Vudayagiri before. Vudayagiri was appointed as a Venture Director around that time.
Lightspeed, which has an India office in New Delhi, is now looking to make PIPE (private investment in public equity) deals, and is looking for a mix between early and late stage companies. It's looking for investments in areas like healthcare, education, fincial services, advertising & media, besides its focus area of technology.

Source: VCCIRCLE

Navis Capital Picks Up Majority Stake in Edutech

2009-05-02T17:40:00.001+05:30

In one of the biggest deals in India's education sector, private equity firm Navis Capital Partners has invested $30 million in Edutech. The PE firm has acquired a majority stake of between 55-80% in Edutech, which provides post-graduate and part-time executive programmes, reports Pei-Asia. The investment in Edutech has been done from Navis V, which raised more than $1 billion in 2007. Edutech has revenues of Rs 55 crore ($11 mn) and seven branches spread across the country. It offers courses in areas like finance, healthcare, hotel management and hospitality.
With this investment, Edutech is planning to open five more campuses and also offer courses in areas like law and engineering. Education, till now has seen growth capital deployment from the PE investors, this would be one of the first controlled transactions in the space.

PE Interest In Education Continues To Increase

Education sector has been increasingly attracting interest from private equity and venture capital investors, especially in the recent times. The investors are attracted by the non-cyclical nature and the huge opportunity presented by this under-served sector in India. The private spending on education is increasing by 14% CAGR and is expected to reach $80 billion by 2012, says a IDFC-SSKI report. Also this sector has managed to give some of the best returns to investors in India's short history of PE & VC industry. Gaja Capital Partners made 24X from their investment in educational technology company Educomp Solutions Ltd. UTI Venture also made 50x on its investment in e-learning firm Excelsoft. Malaysia-based Navis Capital has a strategy of buying majority stake into companies. Late last year, the PE fund acquired a 62% stake BSE-listed lubricants manufacturer SahPetroleums. It has also invested in Delhi-based fast food chain Nirula's and Mumbai-based call center Andromeda.

Source: VCCIRCLE

Dabur expands fruit drink portfolio

2009-05-02T15:06:00.001+05:30

FMCG major Dabur India today entered into the fruit-flavoured beverages segment, with aims to garner up to 5 per cent share in the estimated Rs 1,100- crore Indian fruit beverages market. The company today launched 'Real Burrst', in four flavours — mixed fruit, crispy apple, orange and mango — under its 'Real' brand which is the flagship of Dabur's fruit juice portfolio. "Dabur has been in the health and nutritious drink market under our Real and Activ brand. However, we are entering the non-fizzy fruit-flavoured beverage market under our 'Real Burrst' brand," Dabur India Marketing Head (Food Division) K K Chutani told reporters here. He said the company is looking at getting a market share of 4-5 per cent within the next three years in the Indian fruit-flavoured beverages market on the back of its new products. "However, our entire fruit drink business is around Rs 300 crore and is growing at a rate of 23 per cent. So we want to maintain it," he said. Dabur's 'Real Burrst' will take on the likes of 'Maaza' and 'Frooti', the major players in the fruit-flavoured beverages market in the country.

Source: Business Standard

Gulf Air to cancel Jet lease deal

2009-05-02T15:03:00.002+05:30

Bahrain's national carrier Gulf Air has walked away from a deal to lease four Boeing 777 aircraft from India's Jet Airways, citing economic conditions. Gulf Air said it had an option to lease the aircraft after an existing six-month contract expires, but has decided not to go ahead, the Gulf Daily News reported. "After careful analysis of various commercial and other business considerations, Gulf Air has decided not to pursue the dry lease option for the foreseeable future," the daily quoted the airline as saying. Dry leases are contracts under which airlines lease planes without staff. Gulf Air said in February it had agreed to lease four Boeing 777s as part of its efforts to replace its fleet. The existing six-month contract is a wet lease agreement, which typically includes staff. Meanwhile, Gulf Air has placed a $270 million order for CFM56-5B engines to power 15 new Airbus A320 family aircraft. The aircraft are scheduled for delivery between 2009 and 2013. The carrier has also signed a 10-year On Point Solution agreement of $100 million with GE Aviation for the maintenance, repair and overhaul of the engines. "Selecting the CFM56-5B engine demonstrates our continued trust and confidence in this product's excellent technical capability," said Gulf Air chairman Talal Alzain.

Source: Business Standard

ArcelorMittal to raise $4 bn via public offerings

2009-05-02T14:54:00.005+05:30

Steel behemoth ArcelorMittal, which posted consecutive quarterly losses, today said it would raise up to $4 billion through issue of securities as part of efforts to strengthen its balance sheet among other things. The company would look to sell about 140 million common shares through public offerings to raise the amount. "Total aggregate proceeds from the offerings are about $3.5 billion or $4 billion, in each case before deduction of underwriting discounts and commissions," the company said in a statement. The company intends to use the proceeds of common stock offering for general corporate purposes and to strengthen its balance sheet and the proceeds of the convertible senior note offering to lengthen its debt maturity profile and refinance existing indebtedness, it added. ArcelorMittal also said it would be pricing its public offering of $700 million aggregate principal amount of 5 per cent convertible senior notes due May 15, 2014. The offering is scheduled to close on May 6, 2009, it added. The steel giant said it has agreed to sell 125.1 million common shares at a public offering price of euro 17.10 each. The company has granted the underwriters an option to purchase up to an additional 15.7 million common shares in the 30 day period following the date here of, it added. ArcelorMittal yesterday posted loss of $1.1 billion for the first quarter ended March 2009. In the year-ago period, it had a net income of $2.4 billion.

Source: Business Standard

India-focused M&A at $7.4 bn; lowest in 4 yrs

2009-05-02T14:50:00.002+05:30

Mergers and acquisitions (M&A) involving Indian firms in 2009 so far have been the lowest in four years for comparable periods, touching just $7.4 billions, thanks to the global economic slowdown. M&A volume of $7.4 billion represents a massive 51 per cent decline from the corresponding period a year ago, global deal tracking firm Dealogic said. Out of $7.4-billion M&A deals involving Indian firms, inbound deals amounted to $1.6 billion where foreign firms bought stake in Indian companies. "Inbound cross-border M&A fell to $1.6 billion via 70 deals so far this year, down 77 per cent from last year. The US remained the biggest investor in Indian firms with $483 million via 21 deals," Dealogic added. Outbound M&A activity fell drastically to just $334 million through 34 deals, a 96 per cent fall from the same period last year. The US was the most targeted nation as M&As worth $157 million were carried out through 10 deals, as compared to $1.6 billion via 29 deals last year to date. The oil and gas sector was the most active segment this year. The space cornered as many as six deals worth $2.1 billion. Besides the largest M&A transaction -- Reliance Industries’ open offer to acquire the remaining 25 per cent of Reliance Petroleum for $1.7 billion also happened in this section.

Source: Business Standard

Bharti, Alcatel in $500 mn deal for network mgt

2009-05-02T14:47:00.000+05:30

Telecom major Bharti Airtel today signed a five-year managed services deal valued at $500 million with Alcatel Lucent for its fixed-line and broadband operations. The services would be managed by a joint venture in which Alcatel Lucent would hold 74 per cent, while the remaining 26 per cent would be held by Airtel, Bharti Airtel Chief Executive Officer Manoj Kohli said.
The JV would be run by Alcatel Lucent with 4,000 employees, some of whom would come from the network management firm. "The JV will manage Airtel's fixedline and broadband services," Kohli said. Bharti has already outsourced its network management to Nokia Siemens and Ericsson in two different deals for its wireless business while its IT infrastructure is managed by IBM.

Source: Business Standard

Adani Power inks transmission deal with Siemens

2009-05-02T14:40:00.003+05:30

Adani Power, a part of the Adani Group, today awarded Siemens, a Rs 1,380-crore contract for transmission of power from its Mundra power plant to Mohindergarh in Haryana. As per the contract, Siemens Ltd and Siemens AG will install a bipolar 500-kilovolt high voltage direct current (HVDC) transmission system of 2,500 MW capacity. "We have signed a contract of Rs 1,380-crore with Siemens to transfer power over a distance of around 1,000 km from our Mundra power plant to Mohindergarh.The HVDC technology used by Siemens is much superior than the traditional one," Adani Enterprises CEO (Power), R K Madan, told reporters here.
The dedicated HVDC power transmission is more cost- effective and energy-efficient compared to the conventional AC power transmission lines, he said, adding, "the transmission losses would also be lesser as power is transmitted in the form of direct current." The first phase of installation of HVDC transmission system would be completed by February 2011 and the second phase in July 2011, Madan said. Adani Power is setting up a 4,620 MW thermal power plant at Mundra with its first unit to be commissioned in May-June this year, he said.

Sequoia, Silicon Valley buy stake in web ad co

2009-05-02T14:12:00.002+05:30

Venture capital firm Sequoia Capital India and Silicon Valley Bank have together picked up a minority stake in web-based advertising company Ideacts Innovations for an undisclosed amount. For Sequoia, this is the second round of investment in the Mumbai-based firm. In 2007, it had picked up a minority stake in the company for $5 million. Although the exact quantum of this year’s investment could not be ascertained, it is believed to be $5-9 million, said a person with direct knowledge of the development. When contacted by ET, Ideacts Innovations co-founder & CEO Rudrajeet Desai confirmed the second round of funding and said: “Sequoia is our first investor who funded us in 2007. The corpus raised this year will help us expand our operations in India.” Sequoia Capital India MD Mohit Bhatnagar added: “We have reinvested in Ideacts because of the consistency it has shown in growth.” Ideacts is an internet media venture founded in March 2007 by three entrepreneurs — Rudrajeet Desai, Maninder Gill and Saurabh Khullar. Its first product CLINCK is an active desktop application, which creates a default interface for users to access Internet. The firm is currently looking at ramping up its operation and deploying CLINCK in tier II and tier III cities across the country. It is also developing an accounting software application.

Source: Economic Times

Star's Yashpal Khanna may start new venture in the media space

2009-05-02T14:08:00.001+05:30

Yashpal Khanna, executive vice-president, Star India, has resigned after a 17-year tenure at the company. Confirming the development, Khanna said: “I have enjoyed my stint at Star. I have met and worked with some extraordinary professionals and, hopefully, have contributed to the growth of the company that I joined in 1992. I am leaving because I felt it was time to explore some of my dreams. I am now turning to be an entrepreneur, leveraging my experiences of my 35-year career and the relationships that I have built and nurtured over the years.”However, Khanna would not confirm what he was starting except to say that “the new venture would be in the media and communications space."Khanna joined Star when it was run by the original owner, Richard Li of Hutchison Whampoa. He started his Star stint under Siddharth Ray, as virtually a one-man ad sales team.Khanna was a critical member of Peter Mukerjea’s core team after Mukerjea joined Star India, overseeing the advertising sales function. Khanna moved from his ad sales role to look after marketing, business development, client relations and corporate communications functions.While a number of those who formed part of Mukerjea’s core team joined INX Media on Mukerjea’s exit, Khanna opted to stay at Star India.

Source: Brand Republic

India offloading stake in Asian Development Bank

2009-05-02T14:05:00.001+05:30

India is offloading its equity in the Manila-based Asian Development Bank (ADB), Indonesian news agency Antara said on Tuesday, quoting officials. Indonesia is ready to acquire 1.5 per cent of India's stake to increase its equity in the bank from current 5.5 per cent, the agency said. India owns a 6.3 per cent stake in the ADB, while China has a 6.4 per cent. The largest shares in the bank are held by the US and Japan, each holding 15.57 per cent. India has been wanting to increase its shareholding in the other multilateral organisations like the International Monetary Fund and the World Bank.

Source: Antara

Reliance Big TV plans to divest 49% in DTH arm

2009-05-02T13:52:00.001+05:30

To expand its services in the five-player private direct-to-home (DTH) market, Reliance Big TV Ltd, the promoter of Big TV DTH services of the Reliance ADA Group, plans to sell up to 49 per cent to foreign private equity companies and global DTH players. According to sources, a clutch of leading private equity companies like the Carlyle Group, Sequoia Capital, KKR and US-based DTH firm Direct TV are said to be in talks with Big TV, which launched in August 2008. The company expects to close the deal this quarter, sources close to the development said.
Investment banking sources said the company expects to raise about Rs 8,000 crore. Big TV is currently the second smallest player, with just over 1.8 million subscribers out of 12.5 million DTH customers in India. It is, however, hoping to leverage the Big brand, which also has interests in multiplexes, film production, FM radio and the movie rental business. Big TV is the only DTH firm with no foreign investments. All other DTH players — Tata Sky, Sun Direct, Airtel's Digital TV and Dish TV — have foreign investments of more than 20 per cent, industry sources said. Government norms allow 49 per cent foreign investment in DTH, with a rider that the foreign direct investment (FDI) cannot exceed 20 per cent within the overall 49 per cent foreign investment cap. Asked about the deal, a Reliance ADA Group spokesperson declined to comment, saying Reliance ADA Group is committed to its shareholders and will continue to explore various options to increase the shareholders’ value. Big TV claimed to have added over one million subscribers within 90 days of its launch, a record of sorts amongst DTH players.
All DTH players are currently looking for finance because the DTH service business model involves a significant financial subsidy for subscriber acquisition. Dish TV, with over 5 million subscribers, is the leading DTH player, followed by Tata Sky (about 4 million), Sun Direct (over 2.3 million subscribers), Big TV and Digital TV.

Source: Business Standard

IFC to invest 20 per cent in Indian venture capital fund

2009-05-02T13:49:00.001+05:30

The International Finance Corporation, the private sector arm of the World Bank, will invest up to 20 per cent of capital committed to the India-dedicated VenturEast Life Fund III.The fund, managed by VenturEast Mauritius Investment Advisors, will invest in expansion capital in small and medium businesses across India. The focus will be on life sciences sectors including healthcare, food and agriculture. The IFC investment is aimed at stimulating economic activity and employment growth outside the larger Indian cities. In 2007, IFC also invested $15m in the $150m VenturEast Proactive Fund, a technology-focused venture capital fund which so far has invested in a variety of sectors including technology for microfinance, infrastructure technology and semiconductors.

Source: Alt Assets

India Infrastructure Fund invests $50 mn in two toll road projects

2009-05-02T13:43:00.003+05:30

India Infrastructure Fund, or IIF, has invested $50 million (around Rs250 crore) in two companies floated by Nashik’s Ashoka Buildcon Ltd to build two stretches of road connecting two cities of Maharashtra and Chhattisgarh, according to M.K. Sinha, president and chief executive officer of IDFC Project Equity Co. Ltd, which manages the fund. The fund has taken a 49% stake in these two entities, both structured as so-called special purpose vehicles, or SPV, which will build two stretches of toll roads totalling 162km between Nagpur in Maharashtra and Raipur in Chhattisgarh. SPVs are limited to the financing of specific assets. This is the third investment from IIF, sponsored by IDFC, Citigroup Inc. and India Infrastructure Finance Co. Ltd (IIFCL). The first investment was for $70 million across four road projects, which acted as seed assets for the fund, and the second was a $70 million investment in Essar Power Ltd in March. IIF was conceived in 2007 by IDFC, Blackstone Group LP, Citigroup and IIFCL to invest in India’s fledgling infrastructure projects. Going by government estimates, India needs $500 billion of investments in the infrastructure sector through 2012. The fund was to raise up to $5 billion—$2 billion equity and $3 billion long-term debt—but the corpus was subsequently reduced, with IIF garnering $875 million in commitments from investors in June 2008, and on the road to close another $50 million. Blackstone pulled out of the fund as the economics did not work in the US buyout fund’s favour. “Almost 60% of our fund will be deployed between power generation and road projects,” said Sinha of IDFC Project Equity, adding that ports, airports, telecom infrastructure and power and gas distribution and transmission projects will make up the remaining. The fund, according to him, will make investments at the project level, compared with private equity, which typically comes in at the holding company level, potentially exposed to several undeveloped projects. “Our investments will be in projects that are either under construction or up and running, and are likely to generate dividends quickly. Our focus is more on regular cash flow by way of dividends, not just capital appreciation. Private equity can live without dividends and generate returns upon exit over three-five years. We would like to generate dividend income over the lifetime of the asset,” said Sinha. That will mean that returns may not be as high as private equity, but a return mix that’s a blend between dividend income and capital appreciation on exit. “When I say low returns, it’s still in the 18-20% range, but we’re not looking to generate those returns in two or three years. We’re looking to generate those returns over 8-10 years,” said Sinha. The fund term for IIF is 12 years, extendable by another three years. Even as many listed infrastructure funds globally are hurting, there are not too many options for funds such as IIF to exit project-level investments, other than listing. “We do not borrow as a fund. Most of the other listed infrastructure funds that are hurting are those that have borrowed and do not have matching cash flows to service that borrowing. We do not intend doing that,” said Sinha. IIF is negotiating exit options at the investment level as well. This could involve transferring its equity from the SPV level into a holding company at the time of the initial share sale or a put option or even a tag-along, which enables the fund to sell when the promoters are selling out. A put option will give the fund the right to sell its holding back to the promoter at a pre-determined price. “There are various ways of exiting SPV investments as well. The most optimal one would be to list the fund, but we don’t know whether that will happen,” Sinha said.

Source: Livemint

Suzlon pays 30 mn euro for REpower stake

2009-05-02T13:37:00.001+05:30

Suzlon Energy Ltd, India’s largest maker of wind turbines, paid €30 million (around Rs200 crore) to Martifer SGPS SA as part payment for a stake in a REpower Systems AG, the Portuguese company said in a statement on its website. The money was received on Thursday. Suzlon needs to pay the remaining €175 million this month to complete the purchase of the 22.4% stake in REpower, Martifer said. Suzlon paid €65 million in December as the first instalment for the stake, Martifer said.

Source: Livemint

Arvind Jadhav is new CMD of Nacil

2009-05-02T13:34:00.000+05:30

Arvind Jadhav, a 1978 batch Indian Administrative Service officer, has been appointed the chairman and managing director (CMD) of National Aviation Co. of India Ltd (Nacil), which runs the Air India branded airlines. The appointment has been approved by the Prime Minister’s Office late on Thursday evening, a senior government official told Mint. Jadhav’s candidature was suggested by a committee headed by cabinet secretary K.M. Chandrasekhar last week after the government decided to replace the incumbent CMD Raghu Menon. Jadhav is likely to take office on Monday

Source: Livemint

Citi Reaps Billions From Japan Sale

2009-05-02T13:31:00.002+05:30

Citigroup Inc. said it is selling its Japanese retail brokerage to Sumitomo Mitsui Financial Group Inc. in a deal worth a total $7.9 billion as part of its ongoing efforts to sell non-core businesses and boost its capital ratios.
The deal comes at a time when Citigroup is under pressure to raise more capital based on the early results of the government's stress tests of lenders, people familiar with the situation have said.
Citigroup will reap 545 billion yen for the retail broker, Nikko Cordial Securities, as well as 28.5 billion yen from the sale of Japanese-listed shares it is offloading at the same time. The U.S. bank will also recover 201 billion yen of excess cash on the retail broker's balance sheet.
The New York-based bank expects to get a $2.5 billion equity boost from the transaction. As a result, Citigroup's Tier 1 capital ratio as of March 31 would have been lifted by 27 basis points on a pro forma basis.
Citigroup acquired Nikko Cordial Group for 1.6 trillion yen ($16.17 billion) in a series of deals completed in January 2008. It still owns Nikko Asset Management Co., which is being sold in a separate process, and Nikko's merchant-banking business. Citigroup expects to book an after-tax loss of about $200 million.
The move turns Sumitomo Mitsui into a major player in the domestic securities industry and illustrates how Japanese firms are consolidating their domestic position by snapping up the assets of foreign firms hit by the global financial crisis.
"The transaction announced today has the potential to reshape the financial services sector in Japan," said Doug Peterson, chief executive of Citigroup's Japanese businesses.
Hit by credit-related losses and pressured to streamline its sprawling global operations, put up for sale large parts of its Japanese business, including the retail brokerage Nikko Cordial Securities.
Sumitomo Mitsui will hold the keys to Nikko Cordial's 109 retail branches across Japan and a 7,000-strong army of salespeople, allowing it to market securities to one of the world's biggest sources of latent wealth, Japanese households, which are flush with $15 trillion, mostly in cash.
Nikko Cordial has acted as lead manager to about 700 listed Japanese companies. As part of the package, Sumitomo Mitsui will also get the Japanese equity and debt underwriting business of Citigroup's wholesale business. It now owns the well-known Nikko brand in Japan, meaning Citigroup will eventually have to rebrand its other operations in Japan which carry the Nikko name, a person familiar with the matter said.
Sumitomo Mitsui already owns a second-tier retail broker called SMBC Friend Securities and has an investment banking joint venture with Daiwa Securities Group named Daiwa SMBC Securities. Financial analysts say Sumitomo Mitsui will now have a complicated management structure. The bank said it will consider merging Nikko's wholesale business with Daiwa SMBC.
Sumitomo Mitsui's brokerage business has until now trailed behind its large Japanese commercial banking peers, Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group. The three so-called megabanks vied for Nikko Cordial.
Citigroup picked Sumitomo Mitsui from among the three bidders based on price, the structure of the deal but also because it agreed to distribute the U.S. bank's global products over its network.
MUFG was less likely to agree to such a global alliance because of its newly-inked joint venture with Citigroup rival Morgan Stanley, people familiar with the matter said. Mizuho might have considered teamwork but has been distracted by the integration of its own brokerage unit with affiliate Shinko Securities Co., they added.

Source: Wall Street Journal

Danone Group wants to invest Rs 350cr over 5 years

2009-05-02T13:08:00.001+05:30

The Danone Group has told the Foreign Investment Promotion Board (FIPB) that it proposes to invest Rs 300-350 crore over the next five years. It will invest in medical and nutrition sectors in India directly or indirectly via joint ventures (JVs). The group will further invest in baby food, dairy and beverages, it said. It has received a no objection certificate (NOC) from Britannia as well as from Avasthagen and Yakult joint ventures. The Danone Group currently holds 4.21% indirect stake in Avasthagen and has a 50:50 Indian JV with Yakult, Japan. It has sold its stake in Britannia to the Wadias this month.

Source: Moneycontrol

UTV Motion Pictures ventures into Hollywood

2009-05-02T13:04:00.002+05:30

UTV Motion Pictures has signed a foreign sales deal with Madrid-based film sales company 6 SALES, for the Heather Graham starrer, ExTerminators. UTV through its foreign sales partner has already inked deals for Romania, Benulux and Middle Eastern territories. The movie, directed by John Inwood, stars Heather Graham, Jennifer Coolidge and Amber Heard. It is a dark comedy about Alex (Graham), a lonely accountant whose sole act of rage results in her being sentenced to court mandated rage therapy. There she meets Stella (Coolidge), the owner of a small extermination business who uses her car as a weapon; and Nikki (Heard), a dental technician with the face of an angel and the mind of a sociopath. Together these unlikely friends form their own 'silent revolution'. Commenting on the deal, Lokesh Dhar, Vice-President, UTV Motion Pictures, USA said, "With Exterminators, we look forward to strengthening our base in the international markets. After our international co-productions such as The Namesake, I think I Love My Wife and The Happening, ExTerminators is UTV's first independent production in the US and is definitely a landmark for us, as well as the Indian film industry." "The public's response is exactly what we had hoped for: uncontrollable laughter," said Marina Fuentes, 6 SALES partner. "We believe this type of movie is what the audiences are looking for. Good fun entertainment, " she added. The film premiered at SXSW (South by South West) festival in Austin, one of the top film festivals in the US to packed theatres.

Source: Moneycontrol

Panel backs M&A in telecom

2009-05-02T12:58:00.003+05:30

A committee set up to resolve the controversy over allocation of airwaves or spectrum to telecom operators asked the government to modify its policies to allow consolidation in the industry, while opposing a three-year stock sale ban on promoters of companies that acquired telecom licences last year. The communications ministry and telecom regulator Trai had proposed the lock-in period to keep out non-serious players eyeing quick profits. The committee said, instead of imposing a ban on sale, the government should modify existing policies to allow larger operators to buy new entrants to fulfil their spectrum requirements. While suggesting several changes in India’s telecom M&A norms to allow consolidation, the committee criticised the current policy for leading to fragmentation of the sector by allowing about 15 players per circle. All telcos should be allowed to buy and sell spectrum and pay a fee to the government, the panel said, adding that the country should adopt the internationally-accepted auction system for issuing additional airwaves to telcos. ET had reported on April 24 that the committee would recommend auctions for all future spectrum allocations. The committee comprises representatives of the government, telecom regulator Trai, telecom technology experts and industry executives. The committee admitted that some players who received spectrum at a fixed fee may sell it or merge with another company making huge profits without rolling out a network. “Such gains can be moderated by levying a spectrum transfer or merger charge on all such transactions. Allowing such moderated gains is a small price to pay for moving to a market-based mechanism for spectrum allotment,” it said in its draft report, which was submitted to the department of telecom on Friday. The market should be allowed to determine the optimum number of operators by facilitating spectrum transfer and merger, the report said. Currently, India follows a controversial practice of allocating spectrum based on companies’ subscriber base, and is the only country in the world that follows this method. The report said that only the start-up spectrum, which is the minimum amount of radio frequencies that is required to launch mobile services, should be given for free for existing telcos. All subsequent allocations should be only through auctions, it said. The committee has recommended a flat fee for radio frequencies allocated to telcos since January 17, last year, the date on which the committee was set up. But, this one-time fee will be determined by the upcoming 3G auctions. For instance, if Vodafone Essar has been awarded 2 units of radio frequencies in Delhi & Mumbai after January 08, it will have to pay a fee equivalent to what the same amount of airwaves fetched during the 3G auctions. As per the current policy, all telcos share 2-6% of their annual revenues with the government as a fee for using the radio frequencies allotted to them. The committee said this fee should be a flat 3% irrespective of the quantity of radio frequencies that is held by a telecom company. The committee also refused to endorse demands from certain sections of the industry that all existing operators pay a one-time fee for the excess spectrum they hold in order to ensure a level-playing field with new entrants which only have start-up spectrum. The committee felt that that the government need not worry about ensuring an absolute level-playing field between licensees who entered the market at different points in time. “Variable pricing of resources for entrants at different times happens with natural resources like land for industrial development as well. Early or late entry comes with a set of advantages and disadvantages,” the report said. The committee said auctions can be held at regular intervals where telcos get airwaves in blocks of 1 MHz each. It also said that the current cap where GSM operators can hold a maximum of 15 MHz and CDMA players 7.5 MHz be done away with. Instead, it proposed an alternate methodology where a telco can take part in auctions as long as it does not hold more than 25% of the total spectrum available in that state or circle. This implies, the cap will be different for each circle as the availability of radio frequencies varies from state to state. Companies that enter the industry in the future the license will not come bundled with start-up spectrum, and these companies ‘would have to go to the market even for their initial airwaves, recommended the committee.

Source: Economic Times

Shah Rukh looks to exit Kolkata Knight Riders

2009-05-01T14:43:00.001+05:30

After dropping “Kolkata” from Indian Premier League team (IPL) Kolkata Knight Riders (KKR), actor Shah Rukh Khan has started discussions with Nokia, Sahara, the Anil Ambani group, and several other companies to sell the team he bought just over a year ago for Rs 300 crore, and exit the business.
According to sources in Red Chillies Entertainment, KKR’s holding company, “Shah Rukh Khan has been trying to sell a stake in KKR for some time now. But since most companies he approached also wanted management control, Khan is now talking to Nokia, Sahara, Anil Ambani and others to sell his entire shareholding.”
Khan’s public relations officer, however, said she would not be able to confirm the development because she had not met the actor.
None of those who have reportedly been approached confirmed the development. Sahara India’s communications director Abhijit Sarkar said: “We have not been approached by Shah Rukh Khan yet. But if he does, we would be happy to buy the team.”
D Shivakumar, vice-president and managing director (markets), Nokia India, sent a text message saying: “Shah Rukh Khan will keep the team.”
A Reliance Communications spokesperson declined to comment. “A lot of people negotiate with Anil Ambani. I cannot comment unless there is something concrete on table.”
According to the Red Chillies official, Khan wants to exit, owing to the team’s poor performance — so far the team has won only one rain-curtailed game under the Duckworth Lewis method — and rising costs.
“If the Board for Control of Cricket in India (BCCI) does not increase the number of teams for next year, Khan could get double what he paid,” said the Red Chillies official.
Khan is supposed to pay Rs 30 crore per year for the next 10 years. The total annual cost for the team is about Rs 75 crore.
Khan had earlier said that KKR was easily the most successful IPL franchise, making a Rs 13 crore profit last year. However, his costs trebled last year owing to interventions from the Kolkata Municipal Corporation (KMC) and Cricket Association of Bengal.
According to initial calculations, Red Chillies had to pay Rs 90 lakh per match and was supposed to earn Rs 3 crore if all stadium tickets were sold at Eden Gardens. Red Chillies had to pay Rs 20 lakh to the police and municipal tax of Rs 5 lakh. So its expenses per match would have been over Rs 1 crore. But this figure had trebled.
Last year, however, Kolkata Police demanded Rs 2 crore as security fees, against Rs 50 lakh that the organisers of the IPL offered. Then, the Kolkata Municipal Corporation (KMC) demanded Rs 25 lakh from Red Chillies as amusement tax for holding IPL matches at Eden Gardens.
To settle the dispute between Kolkata Police and the IPL organisers over the cost of security arrangements at Eden Gardens, Red Chillies Entertainment had to agree to pay Rs 75 lakh as security fees.
About 5,500 uniformed personnel and about 1,500 sleuths were deployed to secure the stadium and its surrounding areas, since many celebrities were expected to watch the IPL matches at Eden Gardens.
Source: Business Standard

Chinese biggies want to enter Indian car market

2009-04-30T18:06:00.002+05:30

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

2009-04-30T18:00:00.002+05:30

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

2009-04-29T07:26:00.000+05:30

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

2009-04-28T14:08:00.000+05:30

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

2009-04-28T14:00:00.000+05:30

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

2009-04-28T13:57:00.000+05:30

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

2009-04-28T13:54:00.001+05:30

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

2009-04-28T13:50:00.000+05:30

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

2009-04-27T17:55:00.000+05:30

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

2009-04-27T17:49:00.000+05:30

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

2009-04-27T17:46:00.000+05:30

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

2009-04-27T17:44:00.000+05:30

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

2009-04-27T17:40:00.000+05:30

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

2009-04-27T16:34:00.000+05:30

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

2009-04-27T10:18:00.000+05:30

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

2009-04-27T10:12:00.000+05:30

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

2009-04-27T10:03:00.000+05:30

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

2009-04-27T10:00:00.000+05:30

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

2009-04-26T12:17:00.000+05:30

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

2009-04-26T12:16:00.000+05:30

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

2009-04-26T12:02:00.000+05:30

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

2009-04-26T11:35:00.000+05:30

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

2009-04-26T11:29:00.001+05:30

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

2009-04-25T13:34:00.000+05:30

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

2009-04-25T01:19:00.000+05:30

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

2009-04-25T01:16:00.002+05:30

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

2009-04-25T01:14:00.000+05:30

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

2009-04-24T19:05:00.002+05:30

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

2009-04-24T19:02:00.002+05:30

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

2009-04-24T18:59:00.001+05:30

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

2009-04-24T18:21:00.001+05:30

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

2009-04-24T18:18:00.002+05:30

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

2009-04-24T18:15:00.001+05:30

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

2009-04-24T10:40:00.001+05:30

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

2009-04-24T10:35:00.002+05:30

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

2009-04-24T10:28:00.001+05:30

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

2009-04-24T10:01:00.001+05:30

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

2009-04-23T18:44:00.005+05:30

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

2009-04-23T18:41:00.001+05:30

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

2009-04-23T18:38:00.000+05:30

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

2009-04-23T18:35:00.001+05:30

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

2009-04-23T14:06:00.001+05:30

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

2009-04-22T18:24:00.005+05:30

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

2009-04-22T18:08:00.002+05:30

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

2009-04-22T18:06:00.001+05:30

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

2009-04-22T18:03:00.001+05:30

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

2009-04-22T15:57:00.002+05:30

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

2009-04-22T15:53:00.001+05:30

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

2009-04-22T12:32:00.001+05:30

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

Morgan Stanley raises $1.14 Bn FOF; To Invest in emerging mkts

2009-04-21T18:52:00.000+05:30

Morgan Stanley Investment Management (MSIM) has said that its alternative asset arm has raised $1.14 billion in commitments for Morgan Stanley Private Markets Fund IV, a private equity fund of funds. Its strategy is to emphasize less efficient market segments and target managers with differentiated skill sets in the US, Western Europe and emerging private-equity markets. The firm has also recently opened up an office in Hong Kong.

"In today’s environment, distressed – including secondary purchases – and asset-backed strategies are especially attractive," said Tom Dorr, Chief Investment Officer, Private Equity Fund of Funds Team. The new fund, which is an increase of over 15% from the last fund, will make investments in primary funds, co-investments and direct secondaries.

Emerging markets are increasingly becoming attractive for limited partners (LPs). India ranks third in terms of attractiveness among emerging markets, after China and Brazil, said a recent survey by Emerging Markets Private Equity Association and Coller Capital. The survey added that 78% of the LPs with an exposure to emerging markets are now looking to increase their commitments. This is because most LPs believe that emerging market funds will give better returns developed market funds.

Fundraising has been increasingly getting tough as LPs are cutting commitments to the private equity asset class. Many fund managers have delayed their fund closing dates and are even trimming their fund size in order to reach a close.

Currently there are 78 India-focused funds on road in 2009 looking to raise $24 billion, according to data by Prequin. There are about 117 pan-Asia private equity funds - who have India as one of its geographies - on road currently targeting to raise an aggregate capital of $59.2 billion.

Universal Cables in JV with Furukawa Electric

2009-04-21T18:48:00.001+05:30

Universal Cables Ltd (UCL), part of the M P Birla group, has entered into a joint venture agreement with Furukawa Electric Co, of Japan, for manufacturing and marketing optical fibre in India.
As per the agreement, UCL and associates would have a 55 per cent stake while the balance would be held by Furukawa and its affiliates. The chairman of the board of the joint venture would always be a nominee of UCL from amongst its nominee directors.
D R Bansal, chief mentor and CEO of UCL said, “By combining the pre-eminent position of the M P Birla group in optical fibre and cable business in India, with significant experience and technical expertise of Furukawa with the best in world-class technology and industry leadership position, we will bring our customers a strong product offering, greater breadth of service and increased local presence with value accretive for the customers exceeding expectations."
Bansal added that the partnership would enable the new joint venture to utilize the distribution channels of Furukawa in the international markets to reach new customers and compete effectively with lower cost.

Unitech on assets sale spree, sells Gurgaon hotel

2009-04-21T18:47:00.000+05:30

Unitech Ltd, the country’s second largest developer, on Friday said it has sold out a hotel in Gurgaon for Rs231 crore and is in advance stages of talks for selling out an office complex in the national capital.
The company has also signed memorandum of understandings (MoUs) for sale of school plots in Gurgaon and another realty project in Kochi.
In a presentation to the investors, Unitech said that Marriott Courtyard hotel, comprising 199 rooms, in Gurgaon has been sold out for Rs231 crore to a high networth individual based out of Delhi. Unitech, which raised $325 million to retire part of its Rs8,400 crore debt, plans to sell four more hotels in Noida, Kolkata and Gurgaon within six months. It is also expecting “induction of private equity at project level”. The company is also expecting to close a deal to sell out its Saket office complex, comprising 2.2 lakh sq ft, in the current quarter. As part of its strategy to deal with the slowdown in the realty sector, Unitech is monetising its non-core assets by “deleveraging through sale of assets like hotels, offices and infusion of private equity at individual project level”. The sale of non-core assets are expected to contribute to cash flow of the company. It said that its sales have dipped to an all-time low because of slowdown in property market.

Oracle-Sun deal - Impact on India

2009-04-21T18:35:00.002+05:30

Oracle’s acquisition of Sun Microsystems will create a $1.5-billion (Rs 7,474 crore) entity in India, and help Oracle compete more effectively with arch rival IBM by bundling its business software with Sun’s computer servers, and offering them at competitive rates to customers in the country. This transaction will help Oracle address newer segments of India’s $34 billion market (Forrester estimate) for IT products and services, and increase its share of the overall enterprise software services market. Customers, such as Punjab National Bank (PNB), which already uses hundreds of computer servers from Sun Microsystems and runs several applications through Oracle’s database software, this transaction will surely add value. “Since we have both Oracle and Sun as important vendors, this acquisition will bring a lot of value,” said RIS Sidhu, chief information officer (CIO) of PNB. According to Dataquest, Sun Microsystems India had revenues of Rs 1, 674 crore, while Oracle India’s revenues were estimated to be around Rs 5,800 crore last year.

Religare hikes stake in Vistaar Religare Capital

2009-04-21T18:24:00.000+05:30

Delhi-based financial services firm Religare Enterprises Ltd (REL) has hiked its stake in Vistaar Religare Capital Advisors Ltd (VRCAL), from 50% to 74% for an undisclosed amount. The joint venture between REL and film production company Vistaar Entertainment Ventures Pvt Ltd which manages a film fund with a corpus of Rs 200 crore, was formed last year. As a result of the transaction, VRCAL has now become a subsidiary of REL, a public listed holding company of various financial services businesses promoted by former Ranbaxy owners, Malvinder and Shivinder Singh.

PA Consulting Denies Being in Talks with Cognizant for Buyout Deal

2009-04-21T18:22:00.000+05:30

PA Consulting Group has denied the reports of being in talks with Cognizant Technology Solutions for a buyout deal. Economic Times reported yesterday that Cognizant was in early stage discussions with PA consulting for acquiring it for around $300-350 million.
“PA's Executive team and Board are not, nor have ever been, in talks with Cognizant about anything whatsoever. There is no truth at all in the allegation of an acquisition of PA, nor any part of PA; nor in the possibility of alliances, partnerships or the like,” PA Consulting has said in a statement issued today. The statement further clarifies that PA lays great emphasis on its ability to give its clients independent advice and cites this as a strong reason for not pursuing an alliance with Cognizant. The statement says, “the PA is a highly successful employee-owned global management and technology consulting firm, working across the world with major companies in the private and public sectors. We are one of the large stand most influential sourcing advisory firms and we take very seriously our ability to give our clients independent advice. The emphasis we place on this independence is one reason why we would not pursue an alliance with Cognizant.”
Referring to a report in The Economic Times, PA Consulting has said that it is seeking advice about the “highly inaccurate financial performance information given in the article, particularly as it understates PA's financial performance and is in direct conflict with its audited “information.

GVFL Raises Rs 100 Cr For Rs 250 Cr Fund; To Get Rs 60 Cr More

2009-04-21T18:11:00.000+05:30

GVFL Ltd, which is currently raising its SME Technology Venture Fund with a target of Rs 250 crore, has achieved first close at Rs 100 crore. The fund will get another Rs 60 crore in next few months, the firm's interim Managing Director Mihir Joshi said in an interview to VCCircle. Joshi has been appointed after long standing MD Vishnu Varshney stepped down from his post. Joshi is heading the fund till a new MD is found.
GVFL has raised about Rs 133 crore over five funds till date, and the new fund is its sixth vehicle. The target size of the new fund is nearly more than double the size of all the previous five funds combined. The dramatic increase in the fund size is because the new fund will focus on growth capital investments.
Till now GVFL has focused on early stage deals, investing between Rs 2-10 crore per deal. With the new fund, its deal sizes will go up. GVFL raises most of its funds from domestic institutions and its limited partners include institutions like CDC, IDBI, SIDBI, World Bank and other private and public sector organizations.
Stepping Up Investments
GVFL now seems be looking to step up investments and Joshi believes that this is the best time to invest. "We may close 2-3 more deals in next one month," he added.
The fund is looking to do deals in areas like information technology, biotech and nano technology. It will look at areas like healthcare and education in the IT domain, said Joshi. Some of GVFL's recent deals were white light emitting diode (LED) solar lighting systems maker Pegasus Semiconductors. One of its portfolio firms, 20 Microns, also listed on exchanges in October last year, in which the firm offloaded a part stake.
GVFL is one of the most active and largest state government-backed venture capital firms in the country. Other such VC firms include Punjab Infotech Venture Fund, Kerala Venture Capital Fund, Hyderabad Information Technology Venture Enterprise Ltd, Rajasthan Venture Capital Fund, etc.

Indian Angel Network Invests in Online Library and A Mumbai Based CRO

2009-04-21T12:27:00.000+05:30

Indian Angel Network has made undisclosed investments in two start ups- Kwench and Karmic Lifesciences. While Kwench is an online library service provider for corporates, Karmic Lifesciences is a company dedicated to contract research/clinical research.

IAN members Ajay Garg and Shankar Maruwada, among others, have invested in Kwench and have also taken up seats on the company board. Ajay Garg is the founder of Equirus Capital and was an investment banker with DSP Merrill Lynch. Muruwada, is the founder of Marketics, a marketing analytics services provider.

Kwench is conceived and founded by four Indian Institute of Management (IIM) Ahmedabad alumni- Sunder Nookala, Mitesh Damania, Prashant Koshy and Krishnan Madhabushi. Kwench works on a model that allows corporates to order books online, which is followed by the physical delivery of the ordered books to the employees’ offices or homes.

Kwench’s clientelle include Wipro, WNS. Kwench’s expansion plans include multi city operations and building a multi product-service platform.

According to Mitesh Damania, Kwench founder, “The IAN investment is smart money for Kwench. It is an investment which comes with a wealth of experience, huge potential for building our client base and most importantly, brings valuable guidance as we build this nascent venture, into what we hope, to be a trendsetter company.”

Karmic Lifesciences, on the other hand, is a Mumbai based CRO (clinical research organisation) focused on oncology. It was founded in 2006. Karmic provides concept to clinic services for new drugs as well as generics development and its services include Regulatory Strategy/Submissions, pre-clinical support, clinical trial management (Phase I to IV), clinical data management, bio-statistics and pharmacovigilance services.

Karmic is also partnering with early stage R&D innovators to co-develop and create joint IP on promising new molecules in various stages of development and take them to market.
Source: VCCIRCLE

Shriram City To Sell Windmill Biz; PE Warrant Conversion Put Off

2009-04-21T12:24:00.001+05:30

Shriram City Union Finance (SCUF) plans to extend the validity of warrants issued by the company to four private equity investors from 12 months to 18 months. The warrants were granted alongside allotment of equity shares on May 3, 2008, SCUF said in a statement to the Bombay Stock Exchange today. The private equity investors are ICICI Ventures (through IDBI Trusteeship Services Ltd), ChrysCapital (through Van Gogh Ltd), Asiabridge Fund I (TPG Newbridge) and Bessemer Venture Partners. The company will seek approval of this and other proposals at its Extraordinary General Meeting on May 11, 2009. The other conditions regarding the warrants, which includes price and conversion ratio, will remain the same. The equity shares were subscribed at Rs 400 per share and the current shareholding as of March 30, 2008 stands at ICICI Venture (6.64%), ChrysCapital (13%), Bessemer (2.73%) and TPG Newbridge (1.28%). Another major shareholder is Merrill Lynch Private Equity, which holds an 8.72% stake in SCUF.
The warrants were issued at a subscription price of Rs 40 per warrant, with an option to subscribe to one equity share per warrant at an exercise price of Rs 400. This is higher than the current trading price of Rs 322. The total warrants held by the four private equity players are 3.25 million, and upon conversion will amount to 6.6% stake collectively. With the warrant conversion price at a premium to current trading price, the investors and the company would be hoping that the share price may come to Rs 400 level in the next six months. Otherwise, the investors can pick up the stake through secondary purchases from the open markets.
SCUF, part of the Chennai-based Shriram Group, is one of the largest retail financiers in the consumer durable segment. In September last year, Shriram Group sold a 49% stake in Shriram Retail Holdings Ltd, the holding company of of SCUF, to Texas Pacific Group (TPG). Through this deal, TPG indirectly acquired upto 26.7% in SCUF, and has made an open offer for another 20% stake in the firm. Warrants have become tricky issues for private equity players with crash of markets from levels reached in January 2008. In February this year, private equity major Warburg Pincus converted warrants held by it in Havell's at a high premium of Rs 690 per share as compared to the then prevailing market price Rs 110-120 per share. But the warrants held by private equity funds in Shriram City Union Finance are optional.
Selling Non-Core Assets
SCUF has also decided to sell its shareholding in non-core assets. These include selling its holding in its windmill business in Tamil Nadu and Karnataka, including assets like plant, machinery, etc. SCUF also plans to sell and transfer stake in Shriram Life Insurance Company Ltd and its wholly owned subsidiary Shriram Non Conventional Energy Ltd.
Interestingly, Shriram Group firm Shriram EPC has promoted along with Bessemer Venture Partners a renewable energy company, Orient Green Power Ltd.

Daimler buys Hero's stake In truck JV For $21.2 Million

2009-04-21T12:22:00.001+05:30

Daimler will pay 16 million euros ($21.2 million) for the remaining 40 percent in its Indian heavy truck joint venture after dwindling finances forced local partner Hero Group to focus on its core business of motorcycles. Referring to the significance of India as "a key to a completely new generation of products," Daimler Trucks said on Wednesday it would invest more than 700 million euros over four years to enter and eventually use the subcontinent as a bridgehead to other emerging markets. The two partners had originally planned to divide the investment in proportion to the size of their stakes. "I really regret the Hero Group's decision, but Daimler Trucks will nonetheless enter the truck volume market in India," said Daimler Trucks chief Andreas Renschler in a statement on Wednesday. "Nothing has changed regarding our plans to manufacture trucks in Chennai. I'm counting on continued good relations with the Hero Group, whose expertise regarding the Indian market is very important for us." Daimler, the world's largest commercial vehicle maker, had hoped its JV with Hero would allow it to compete better against rivals like Volvo, which has a deal with India's Eicher Motors, as well as Tata Motors Ltd, Ashok Leyland and Mahindra & Mahindra. Daimler agreed in December 2007 to locally produce light, medium and heavy-duty commercial vehicles with the Hero Group, which controls 26 percent of India's leading motorcycle maker Hero Honda. The German group had forecast market potential of 500,000 units by 2018, translating to annual growth rates of 7 percent on average versus 2006 -- almost twice as much as the global truck market. Demand for heavy duty vehicles weighing over 16 tonnes would rise by an even faster 10 percent per year. Daimler plans to use to low cost base to export a type of premium commercial vehicles tailored for emerging markets.

KKR Joins Race To Pick Up Stake In Vijay Mallya's USL

2009-04-21T12:20:00.000+05:30

Kohlberg Kravis Roberts & Co, or KKR, has joined the race to pick up a minority stake in Vijay Mallya's United Spirits (USL), which is the world’s third-largest liquor marketer. The private equity biggie is looking to pick up USL’s treasury stocks, which amount to a 14.8%stake in USL, reports Economic Times. Mallya has been in discussions with strategic players like Diageo and Bacardi for some time now, and is now also looking at financial investors.
The shares of USL reacted positively to this news, rising up by more than 6% reaching days high of Rs 751, against its yesterday's closing price of Rs 705. The 14.8% stake as per yesterday's closing price would be valued at Rs 1,045 crore (~$210 million), but Mallya would certainly seek a premium to current trading levels. The stocks 52 week high is Rs 1,873 per share.
A MNC player would be willing pay a premium factoring in the advantage of distributing its the distribution of its products in the Indian market, the world's largest beer market by volume.
The report adds that MNCs are willing to pay as much as Rs 1,400 per share. USL is also looking at issuing fresh shares, apart from selling treasury stocks.
Mallya is raising funds to pay off the Rs 6,900 crore debt on its books. UB Group's recent acquisitions have been funded by debt, including the $827 million acquisition of Whyte & Mackay. The deal will help UB deleverage its balance sheet, which is its first priority.
KKR set up its India office earlier this year, hiring former Citigroup India honcho Sanjay Nayar. A significant minority in one of the worlds largest spirits maker with a 55% share in the fast growing Indian market may just be the grand start its looking for.
It has done couple of deals before setting up office in the country - the leveraged buyout of Aricent, and $250 million for a stake in Bharti Infratel, the telecom tower arm of Bharti Airtel.
PE Investments In The Space
Alcoholic beverages market are considered somewhat recession proof, with sales being affected only mildly. Private equity funds, who are now focusing on India's domestic consumption story, seem to be actively looking at deals in this space now. Private equity firm Wilbur Ross & Co is looking to acquire Cobra Beer brand or take a controlling interest in the beermaker’s Indian unit, as per reports. Standard Chartered Private Equity is also believed to be in the race.
There have been some investments in this space before in India. Lighthouse Funds has picked up a stake in Imperial Spirits and Sula Wineyards has raised funds from a bunch of PE investors including Indivision India Partners, the PE fund of Kishore Biyani's Future Capital Holdings.

UBS Ties Up With UK's Noble For Research On Mid-cap Companies

2009-04-21T12:19:00.000+05:30

Noble, the UK based investment bank specialising in mid and small cap companies research, has formed a strategic alliance with UBS in India for providing research on Indian companies. Under the arrangement, Noble will provide research on Indian mid and small cap companies to UBS’ global institutional client base investing into India.
Noble forayed into the Indian equity business in September 2008 with the acquisition of Clear Capital, a Mumbai based research firm focused on the small and mid cap equity market. Noble currently has a team of 11 analysts and sales people focused on Indian equities, and covering five sectors – Technology, Consumer, Banks/Financial Services, Power and Infrastructure, with a focus on stocks with market cap less than $2.5 billion.
The partnership is aimed at UBS’s existing coverage of BSE 100 companies with Noble’s research in the mid market.
Nick Paulson-Ellis, Head of Equities at Noble, said: “We think that the combination of our research base with access to UBS’ institutional investors and execution capabilities will benefit both the mid-cap companies we cover and those investors wishing to gain exposure to this fast growing segment of the Indian market.”
Saurabh Mukherjea, Head of Indian Equities at Noble, said: “We believe the Indian market presents huge opportunities in the mid- and small cap space.”
Noble group has 120 employees in offices in London, Edinburgh, Mumbai and Houston. It has a financial backing from Arch Group, an asset manager with $2 billion under management. It raised £100m venture debt in April.

Och-Ziff Capital Management, Orient Global and Sandstone Capital invests in Unitech QIP

2009-04-21T12:18:00.002+05:30

India's second-biggest real estate developer Unitech Ltd has raised $325 million through qualified institutional placement (QIP) issue. The funds have been raised by the real estate major to retire part of its over Rs 8,900 crore debt and strengthen the balance sheet.
The investors in the QIP include private equity hedge fund players like Och-Ziff Capital Management, Orient Global and Sandstone Capital, reports Business Standard. Other investors include HSBC and Prudential. Around 90% of the issue has been lapped up by overseasinstitutional investors, while the rest has been bought by domestic institutional investors.
The holdings of promoter Chandra family would fall to 51% after the QIP from 64%. The QIP has been issued at a price of Rs 38.50 per hare. Unitech was trading at Rs 51.5 today at 1 pm, reaching a days high of Rs 54.2. The deal is being touted as the largest QIP in realestate space and was advised by UBS AG's India unit and IDFC-SSKI Securities Ltd.
This is also the first QIP issue since market regulator SEBI allowed firms to fix the price based on the average price of two weeks. Earlier the period of average price calculation was 6 months. Theissue will reduce the debt to equity ratio of Unitech from 2.4 as of December 2008 to 1.4.

Actis Biologics To Raise $400M To Expand Across Asia

2009-04-21T12:18:00.001+05:30

Mumbai-based biotech firm Actis Biologics is looking to raise $400 million to expand operations which is spread across India, US and Malaysia. It is in talks with a UK and a US-based fund to raise the first tranche of $250 million, reports said.
The firm is planning to raise $250 million to invest in Malaysia, $100 million for Indian operations and a further $50 million for the US. "We expect to raise $250 million in the next four months for the Malaysian project. Once that is in place, then we will look funds for the Indian and the US operations," Actis Biologics president PN Venugopalan told PTI according to this report.
It is not clear what would be the mode of the equity transaction, but it is unlikely that it would involve a plain vanilla deal in the parent firm. An earlier report in The Economic Times had quoted the privately held firm’s CEO as saying that the company was looking to sell 15% stake to private equity firm and was in discussions with three foreign players to raise Rs 125 crore through issue of fresh shares. This would have valued the company at Rs 833 crore ($165 million), much lower than what the company is looking to raise now. Given the state of markets it is unlikely that the firm can ask for a significant ramped up valuation within six months.
This earlier report in October 2008 had quoted Actis Biologics president PN Venugopalan as saying that he hoped to finalise a deal before the end of the year. The fund was to be used for a new plant to be built at Khopoli in Mumbai estimated to cost $9.5 million (approximately Rs 44 crore) besides meeting the company’s working capital requirement for the next 10 months.
Meanwhile, Venugopalan told PTI that the company will join hands with the Malaysian government to set up a biotech park called Biocity in Melaka, Malaysia. This project will cost $250 million and Actis Biologics has been allotted 270 acres of land for the project. To support biotech companies, Actis and the Malaysian government would set up a 50:50 JV firm in Malaysia.
Actis Biologics calls itself a biotech venture technology company focusing on the life science sector. It has set up two separate ventures with further subunits in India and Malaysia.
Actis Biologics Pvt Ltd has JVs with entrepreneurs in India to target discovery of new molecules through collaborations and/or internal research or to in-license promising targets. These ventures also seek to add value to the targets by accelerating the progression through the biopharma product life cycle while reducing costs by a significant margin. It also has a JV with Malaysian investors under the umbrella of Actis Biologics Malaysia Sdn Bhd.
Actis Biologics has incorporated under its banner-- Kohinoor Biotech to focus on a Ribozyme tech platform, Aum Life Sciences to focus on development of various recombinant proteins and MABS Mercury Biotech for development of GeneTherapy based products, Deep Biotech for developing various immunotherapies. Actis Biologics Malaysia Sdn Bhd. has under its banner-- Telesto Diagnostics to develop CAD based diagnostics for various abnormalities and Cogenesis to develop novel respiratory products.

Wipro Buys Nokia Mobile TV Technology Unit

2009-04-21T12:11:00.001+05:30

The world's top cellphone maker Nokia has sold its enterprise mobile TV unit to India's Wipro, a spokesman for Nokia said on Monday.
The Mobile Broadcast Solutions unit had about 40 employees and created software and hardware which enabled the mobile TV technology on the phone to find and access the broadcasting network.
"We wanted to focus on the consumer side of things, the mobile TV client in the devices, rather than on the business-to-business side," said the spokesman.
Mobile television broadcasting, the hottest upcoming feature for cellphones only a few years ago, has found little demand anywhere in the world.

Oracle buys Sun Microsystems

2009-04-20T19:26:00.005+05:30

world's number two software company, Oracle Corporation, today agreed to buy hardware company provider Sun Microsystems for US$7.4 bn. in cash, pushing the software company into high-end computing system. "We expect this acquisition to be accretive to Oracle's earnings by at least 15 cents on a non-GAAP basis in the first full year after closing. The business will contribute over $1.5 billion to Oracle's non-GAAP operating profit in the first year, increasing to over $2 billion in the second year," Oracle President Safra Catz said in a statement. The deal comes a month after IBM abandoned its bid to buy Sun. Most analysts see the deal strengthening Oracle's position against IBM. "The acquisition of Sun transforms the IT industry, combining best-in-class enterprise software and mission-critical computing systems," Oracle CEO Larry Ellison said. The impact of this acquisition in India, where both the companies are present for a long time, is not clear at the moment. An Oracle spokesperson said they do not comment on country-specific operations. Oracle is one of the largest multinational employers in India with more than 25,000 employees. Sun Microsystem has 1,200 people in India. Historically, Oracle has aways taken inorganic route to grow and expand its business. Enclosed exhibit details some of the largest acquisitions of Oracle.

Cognizant in talks to buy UK firm Pa Consulting

2009-04-20T07:29:00.000+05:30

Cognizant Technology Solutions, which backed out from Satyam bidding at the last moment, is in talks with London-based Pa Consulting for a buyout deal valued at $300-350 million. The preliminary discussions with the privately-held technology-led consulting firm come even as Cognizant is actively scouting for acquisitions in the European market, sources said.

Cognizant is looking to strengthen its presence in the UK and Continental Europe, from where the company gets 20% of its revenue pegged at $2.89 billion. When contacted, Cognizant CFO Gordon Coburn said in an email response, “We do not comment on speculation in the marketplace.” At the same time, Pa Consulting said, “It is not our policy to publicise or discuss in the media any alliance or partnership arrangements, and we have no comment to make.”

As the talks are still in early stages, sources say there is some doubt on the outcome and the way the deal will be structured. Banking sources said Pa Consulting with its rather strong presence in verticals like healthcare and aerospace have been on the radar of Indian IT firms that are searching inorganic growth options. The 63-year old Pa reported revenues of $342 million for 2008, with profit of $9.4 million. It has 3,000 people spread across multiple geographies with offices in New Delhi and Bangalore. Sources said Cognizant’s consulting-led approach could give Pa, which has been facing rough weather of late, a synergistic push, sources added.

The target company’s revenue during 2007 was estimated at $472 million. Pa’s operating margins reported a significant drop from 13.4% in 2005 to nearly 3.5% in 2007. Cognizant has been very active in the marketplace looking at buying out companies that fits the profile - not necessarily large entities but with skill sets in a specific domain. The last major acquisition done by Cognizant was of marketRx, a US-headquartered analytics firm with sizeable Indian offshore presence, for $135 million in October 2007. In a recent interview with ET, Cognizant CEO Francisco D Souza had said, “The environment has improved and valuations have come down.” In terms of geography focus, Mr D Souza said, “Europe is at the tail end of our investment cycle. Most of our markets have reached critical mass.” It was also being speculated that Cognizant could be looking at larger publicly listed IT services companies like Thales SA, Ciber and Invensys. But there was no confirmation on any of these companies holding talks with Cognizant.
Many of the larger Indian IT companies have made acquisitions in Europe or actively scouting the market. In the recent past, HCL Technologies acquired UK based SAP services firm Axon, while Wipro snapped up NewLogic. Interest in Europe has increased, as Indian IT firms look for inorganic growth in markets outside the US that is going though a recession.

Source: http://economictimes.indiatimes.com/Cognizant-in-talks-to-buy-UK-firm-Pa-Consulting/articleshow/4422156.cms

Top european fund likely to invest Rs300 crores in Sobha developers

2009-04-17T18:46:00.001+05:30

Redevco, one of Europe’s largest real estate investment and development firms, with a $10 billion portfolio, is understood to be looking at investing around Rs 300 crore in various projects of Bangalore-based Sobha Developers. Redevco, part of the diversified Cafro Holdings, which is into private equity, retail, financial services and renewable energy, in addition to real estate development, set up office in India in late 2008. If the discussions with Sobha fructify, it will be its first investment in India. Investment banking sources indicated that Redevco has had initial discussions with the management of Sobha Developers, which is mired in debt like many of its peers. The investment, if it materialises, is expected to be tied up by September 2009, they say. Private equity investments into Indian real estate have been slowing over the past three quarters and this deal is expected to be a major one. While Redevco said it had nothing to comment, Sobha has been maintaining that it is in talks with various funds and nothing has been finalised. Over the past two quarters, Sobha has been aggressively looking at three options to reduce its debt burden of close to Rs 1,900 crore, a leverage of 1.6 times. The company, which has Infosys as one of its major clients, is looking to raise around Rs 850 crore by selling around 200 acres of its 3,000 acre land bank, offloading up to 49 percent stake through special purpose vehicles and to offload up to 25 percent stake at the enterprise level. Sobha is understood to have identified around 150 acres of land on which projects can be implemented through special purpose vehicles by divesting stakes. The company is also engaged with around 12 banks and financial institutions to restructure around Rs 850 crore of debt that will be due for payment during the next 18 months. Banking sources indicate Sobha has been able to get a nod for a part of that sum and talks are also on with mutual funds to roll over Rs 350 crore of debt.

DLF cannot raise money through new equity offering

2009-04-16T13:48:00.012+05:30

Promoters of the company are holding more than 88% of the common stock. However they don't have option to raise money through equity. According to section 77A of the Company Act (buy-back provisions), a company buying back its own shares is prohibited from making further issue of shares (for six months) following the completion of buyback. According to notification dated 15th October, 2008, the company is expected to complete the buy-back process by July 9, 2009. This efectively means that DLF cannot raise money through equity markets untill January 2010.

This is not in favor of DLF especially during (1) times of renewed optimism in equity markets and (2) when peers like Unitech and Sohba are looking to aggresively reduce their balance-sheet leverage by offering additional stock.

No wonder DLF has approached the government to surrender five of its nine IT-ITeS notified special economic zones (SEZ), according to a PTI report quoting a senior Commerce Ministry official. As per the SEZ Act, the tax-free enclaves cannot be surrendered once they become operational. DLF, however, has not started work on the five SEZs that it wants to surrender. Its nine notified SEZs are located in various states. According to official data, the land bank of DLF's nine notified SEZs include 10.61 hectares near Hyderabad, 10.12 hectares in Gandhinagar, 12.06 hectares and 10.73 hectares in Gurgaon, 10.24 hectares in Sonepat, 10.33 hectares in Pune, 10.23 hectares in Bhubaneswar, 13.29 hectares in Kanchipuram and 10.48 hectares in Kolkata. It is not clear which SEZs are now sought to be cancelled.

Furthermore, recent press reports indicate that the firm has decided to shelve plans of its ambitious hotel (sells saket hotel for Rs55 crores) and wind power projects (refer to link http://mergers-in-india.blogspot.com/2009/03/dlf-to-sell-its-wind-power-business.html) for cash constraints

Fresh controversy. ICAI disappointed over Satyam stake sale

2009-04-15T17:50:00.002+05:30

Apex accounting body ICAI on Wednesday said it is “disappointed” over the manner in which the deal to acquire scam-tainted Satyam Computer Services by Tech Mahindra was announced even before the IT major’s accounts were restated. “I am totally disappointed (over the deal). I am unable to understand how they (the authorities at Satyam) decided the value of Satyam before its accounts were restated,” Institute of Chartered Accountants of India (ICAI) president Uttam Prakash Agarwal said here. “Today, such a large deal has taken place without finalising the accounts and assessing the current valuation (of Satyam). This is speculative activity,” he said.
Tech Mahindra emerged as a winner in the race to acquire the Hyderabad-based company with the highest bid price of Rs58 per share. The IT firm, led by Anand Mahindra, would have to shell out about Rs2,889 crore to acquire a 51% stake in the fraud-hit company. Agarwal said when the Satyam scam surfaced in January, people said that shareholders lost money because the books of accounts were not audited properly by chartered accountants. He said the two sacked Price Waterhouse chartered accountants involved in Satyam’s auditing should not be blamed as they got incorrect statements from the company. “Whenever something goes wrong with a company’s accounts, the chartered accountants (are blamed). It is a gameplan of the management,” Agarwal said.

NMCE In Talks With Investors For Stake Sale-CEO

2009-04-15T17:46:00.001+05:30

The National Multi-Commodity Exchange (NMCE) is in talks with a few domestic and foreign investors to sell a stake in India's third biggest commodity bourse, a top official said on Tuesday.
"Foreign investors have also shown interest to pick up stake in NMCE. Right now talks are on," Chief Executive Anil Mishra said in an interview, but declined to reveal names of likely investors.
If foreign investors pick up a stake in NMCE, the bourse would join the league of bigger rivals Multi-Commodity Exchange and National Commodity and Derivatives Exchange, which have significant foreign investment. Indian laws do not permit a foreign entity to buy more than 5 percent stake in the country's commodity bourses, subject to a total foreign investment limit of 49 percent, including 26 percent foreign direct investment. NMCE's trade turnover rose 142 percent to 615 billion rupees in 2008/09. This was the fastest trade growth among the 22 Indian commodity bourses last year. Volume rose 285 percent to 18.4 million tonnes during the same period. This was due to addition of new members, Mishra said. "Total number of members last year was about 200 members and is now more than 300." Also, the launch of futures contracts in products such as coffee, cotton and re-launch of poorly traded contracts like guar seed, rape seed have also helped, he said. "Number of active products on the exchange is about 20 now from 8 a year ago." NMCE plans to continue its focus on agri-products in the current year rather than dabbling in metals and "exotic" contracts, he said. "Price discovery and risk management are prime objectives of a commodity futures market. In metals futures it's not there right now. The focus will be on agri-commodities." Many analysts attribute the growth in NMCE's business to its association with Reliance Money, which picked up a 26 percent stake last year.
However, Mishra said, the growth has been achieved by the exchange itself with participation from across India. NMCE's other stakeholders include Neptune Overseas Ltd, Central Warehousing Corporation (CWC), National Agricultural Co-operative Marketing Federation, Gujarat Agro-Industries Corp and Gujarat State Agricultural Marketing Board.

Mittal to transfer 50% of Kazakh oil field stake to OVL

2009-04-15T17:44:00.001+05:30

Steel czar Lakshmi N Mittal has offered to sell half of his stake in a Kazakhstan oil field to state-run ONGC Videsh in line with its previous commitment, a statement from his holding company said today. "Mittal has offered to transfer half of its stake (in Caspian Investments Resources) to OVL in line with its previous commitment to OVL," Mittal Investment Managing Director Sarl Sudhir Maheshwari said in an e-mail statement. Mittal Investment Sarl, the holding company of Mittal family's interest in world's largest steel firm ArcelorMittal, had in April 2007 acquired 25 per cent stake in Caspian Investments Resources from Russian oil firm Lukoil for $980 million. Maheshwari said "Mittal Family is comfortable with its stake in the Kazakh Caspian project" and the transfer had nothing to do with financial constraints or funding requirement for the Satpayev field which it along with OVL had been allocated in January this year. He, however, said the stake transfer to OVL in Caspian was "subject to the pre-emption rights of the partner (Kazakhstan national oil firm KazMunaiGaz) or the Government of Kazakhstan." Kazakhstan law stipulates KazMunaiGaz taking half of ownership of an oil property at every equity stake transfer.