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

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

UTI AMC to divest 26 pc stake; open to acquisition

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

Source: Economic Times

IDBI Bank in talks with government for rights issue

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

Source: Economic Times

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

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

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

Source: AltAssets

BankAm Merrill India head & team join JP Morgan Chase

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

Source: Economic Times

Morningstar starts India operations

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

Source: Business Standard

Religare hikes stake in Vistaar Religare Capital

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.

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

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.

Bahrain's Unicorn Investment Bank is looking out for acquisitions in Gulf Arab region, Europe and Asia

The bank was looking to acquire two Gulf Arab lenders, both in retail and investment banking, and would consider acquiring retail banks in Pakistan, India, and Malaysia as well as one in Britain or continental Europe, he said, declining to give a timeframe or name targets."We are aggressively looking for potential targets and securing our acquisition financing as we speak," he said.

In September, Unicorn said it was looking to spend up to $2 billion to buy banks in Europe, southeast Asia and the Gulf.Talks on a merger with several Gulf Arab lenders outside Bahrain were continuing, he said, declining to be more specific.Unicorn was planning to issue a $425 million sukuk with an ijara-type structure by the third quarter or "hopefully in the second quarter", Refai said. The group is in talks with two regional banks over arranging the Islamic bond issue, he said.Plans announced last September to issue $1.5 billion worth of Islamic bonds by the end of 2008 had been postponed due to market conditions, he said.Unicorn would "just about break even" in the first quarter, Refai said. He said it would announce a revamp to tackle the global financial turmoil, which could include lay-offs and closing operations no longer deemed profitable abroad."We will be announcing pretty soon ... a restructuring of the bank to go along with the crisis .... We have to take drastic action early," he said.

Goldman Seeks New Stock Sale

Goldman Sachs Group Inc., riding a rising market, is considering making a multibillion-dollar offering of its shares to investors as part of an effort to repay a $10 billion government loan, according to people familiar with the matter.
The move, which could be announced as early as next week, comes as the firm prepares to report solid first-quarter earnings Tuesday. Goldman executives haven't determined the exact size of the offering, but it is expected to be at least several billion dollars, these people say. They caution a final decision isn't made, and will be based partly on market conditions

In October, the Treasury Department forced the nation's largest banks, including those that didn't need additional capital, to take government funds. Goldman received $10 billion. The view was that infusing all banks with capital would help shore up the financial sector more quickly and avoid tarring some banks as weak.
But stock markets now have risen for five consecutive weeks, and shares of financial firms have helped lead the rally. Thursday, Goldman's shares rose $9.58 a share, or 8%, to $124.33 on the New York Stock Exchange, and are trading at their highest level since October.
Repaying the government is favored by Goldman's employees, eager for the paydays of the past; by investors, who applauded the firm's finance chief when he made the suggestion; and its executives, who believe the government's role will make it harder for the firm to compete.
Goldman has weathered the mortgage meltdown better than many rivals; it holds about $111 billion in cash and cash-equivalent securities. Goldman executives privately say the firm doesn't need new capital to pay back the loan but doing so would signal its financial health.

BSE, United SE in talks for strategic alliance

More Indian bourses are talking to each other to survive a long, fierce battle for business that's beginning to unfold in the local financial markets. The country's oldest exchange, Bombay Stock Exchange, has had preliminary discussions with United Stock Exchange of India, the youngest of the bourse, for a strategic alliance. A possible deal, that may take some time to consummate, could include equity participation, product sharing, marketing and distribution tie-ups and a common clearing house. Senior officials of the two exchanges had first explored the idea a few months ago and had met more recently to discuss the possibility. But there's a string of tricky issues that have to be sorted out before the exchanges can move ahead with the deal. For instance, BSE, as a strategic player, would like to hold more than 5% in the new exchange. According to exchange officials, while United SE is now open to offering a higher stake to BSE, formal negotiations are yet to take place on the finer points. "No final decision has been taken on the proposal," Jagdish Capoor, chairman of BSE, told ET. United SE received SEBI approval to launch trading in rupee-dollar futures. A strategic alliance with BSE would help United SE market and distribute its products through BSE's existing member brokerages, while BSE's clearing house, set up with Bank of India, which is also a stakeholder in United SE, can be used to manage the margin requirements of currency derivatives brokers on a real-time basis. However, the two exchanges must arrive at a common risk management approach, technology platform and a management policy before a deal is signed.

Religare, Milestone In 50:50 JV To Manage Education, Healthcare Fund

Religare Enterprises Ltd said on Wednesday that one of its arms has formed a 50:50 joint venture with Milestone Capital to manage a Rs 600 crore healthcare and education fund. Religare along with its affiliates have committed to contribute Rs 60 crore to the fund which has an existing corpus of more than Rs 100 crore. The fund will be raised in India, the statement said, without specifying if it would be 100% domestic capital.
Religare Venture Capital Pvt Ltd, the wholly owned subsidiary of Religare Enterprises, and Milestone Capital will hold equal equity stakes in the JV, which will manage the fund.
The minimum investment amount will be Rs10 lacs; the life of the fund will be 5 years and 18 month will be the commitment period, it said.
Religare has also drawn on some senior medical professionals from its group, a statement said. This would help in healthcare investing, although not so much in education. Religare Enterprises is promoted by the Singhs, the former promoters of Ranbaxy Pharmaceuticals. They also own India's largest medical care chain Fortis Healthcare.
"Private equity has been an area of great interest to us given the mangement’s experience of managing and ramping up businesses at a fast pace. Healthcare and Education are two sectors which we believe are poised for balanced growth and we have the requisite domain expertise on healthcare which we intend to leverage for larger benefit of investors of the fund,” Sunil Godhwani, CEO &MD, Religare said.
Milestone is founded by Ved Prakash Arya, who was earlier with Pantaloon Group. Milestone's India Build Out Fund-I (IBF-I) was launched in August last year with a target of $150 million (Rs 600 crore). It also had said that it had a further green shoe option of $50 million. This was the intention at the boom time last year, while the context has changed right now. As of now, the fund has managed to raise only Rs 100 crore ($25 million).
The fund had said last year that it would invest in sectors such as education and media & entertainment. Now the focus has been expanded to healthcare too. Milestone had also hired Rajesh Singhal from Intel Capital to spearhead the fund.
Milestone seems to be following a partnership model for their funds. In an earlier instance, Milestone had partnered with IL&FS Investment Managers to manage a REIT like structure.
Religare also have a JV model. They formed a PE JV - Vistaar Religare Film Fund - for investing in films and production companies. This JV with Milestone will take Religare's PE activity to other areas as well.
Religare currently has joint ventures for the other financial services such as with Aegon for life insurance and with Macquarie for wealth management.

RBS Begins Sale Process

Royal Bank of Scotland Plc. (RBS) has started the sale process of ABN Amro Bank NV’s retail and commercial banking assets in Asia, including India, reports Mint. They have sent an information memorandum to three prospective buyers—Australia and New Zealand Banking Group Ltd, Standard Chartered Bank Plc., and Hongkong and Shanghai Banking Corp. Ltd, Mint reports quoting a person familiar with the development. Investment bank Morgan Stanley is managing the RBS sale across Asia.

HDFC-HDFC Bank merger talk hots up once again

There is a fresh buzz over a possible HDFC-HDFC Bank merger, following a report by MNC bank Macquarie Research. The report states how the ‘perfect match’ would yield ‘multi-year benefits’. According to a report by Macquarie Research, the upside would come from marrying HDFC Bank’s liabilities base — the best in the country according to Macquaire — with HDFC’s ‘best-in-class’ loan origination franchise. “This would address the concerns over whether HDFC’s wholesale-funded model is scalable, as well as, fill a major gap in HDFC Bank’s asset portfolio. Cross-selling to HDFC’s large customer base would be a secondary opportunity,” the report added. According to Macquarie, HDFC has moved from being a minuscule player in the overall market to being a significant user of national resources. As Figure 6 shows, HDFC’s borrowings now comprise a significant share of incremental deposits in the system. And this will put some pressure on its long-term growth opportunities. We expect that by FY3/13E, HDFC will need bank funding to the extent of 2.8% of incremental bank deposits in the system, which is fairly large for a secondary borrower. Another hurdle for HDFC’s funding is single-borrower limits for banks. Banks cannot lend more than 15% of their total capital to any single borrower.

StanChart Private Equity Invests in Man Infra; Averages in M&M Finserv

Standard Chartered Private Equity (SCPE) is one fund that is looking to make best of the falling valuations. The fund has bought an undisclosed stake in construction company Man Infraconstruction. It has also upped its stake in Mahindra & Mahindra Financial Services,the vehicle finance arm of automotive major. This comes after SCPE picked up stakes in Indian public sector banks Karur Vysya Bank Ltd and Indian Overseas Bank in February from open markets.
The private equity fund has increased the stake in the firm to 9.54% from 7.45% earlier, Mahindra & Mahindra Financial Services said in a filing to the Bombay Stock Exchange. SCPE has bought this 2.09% stake for a total amount of Rs 37.5 crore, at an average share price of Rs 193. This is nearly half of the price at which the fund was allotted shares at Rs 370 per share last year. With open market stake buys, SCPE is bringing down its average price of share purchase.
SCPE had picked up a 4% stake through preferential allotment in early 2008, when TPG-Axon also picked up a 7.22% stake. Private equity major ChrysCapital also picked up a 4.16% stake in a pre-IPO deal in in 2006 in the company through its wholly owned subsidiary Copa Cabana. The stake was bought for Rs 190 per share and was to fall to 3.67% post-issue.
But Copa Cabana's shareholding stands at 4.87% as of December 2008, and Dali Ltd, another entity owned by ChrysCapital has a 3.55% stake in the firm. This takes the total stake held by ChrysCap in Mahindra & Mahindra Financial Services at 8.42%.
In another development, SCPE has invested an undisclosed amount in Man Infraconstruction Limited, reports PTI. The company has also earlier raised monies from Sabre-Abraaj Fund. Man Infra specialises in civil construction services in infrastructure (primarily ports), industrial structures, residential and commercial real estate. SCPE is also evaluating inorganic options for the company in order to expand its footprint.

Bharti likely to sell stake in asset management JV with AXA

Bharti plans to rework its relationship with AXA, reports CNBC-TV18, quoting sources. It is looking to exit its asset management joint venture with AXA and might dilute its stake or exit if necessary. Commenting on the same, Bharti said reworking in relationship will not impact insurance business with AXA. Bharti has 26% stake in Asset Management JV with AXA. This is the one of the first steps of Bharti to rework its relationship with AXA, Bharti has categorically come out and said that it is looking at diluting its stake or even exiting Asset Management business in which Bharti holds 26% stake and remaining 74% stake is held by AXA. In other ventures where these two have a relationship is the life insurance business, where Bharti holds a 74% stake and AXA holds a 26% stake by virtue of being regulated. As of now Bharti has very categorically said that they haven’t changed anything in their insurance business but have gone ahead and seen the asset management business in which they are willing to dilute or even exit the business at this point of time.

Aditya Birla buys stake in financial services firm

Aditya Birla Nuvo Ltd on Tuesday said that it has acquired over 3.5 million equity shares in its subsidiary Birla Sun Life Distribution Co (BSDL). The shares were acquired from Canada-based Sun Life (India) Distribution Investments Inc. BSDL has now become a wholly-owned subsidiary of the Aditya Birla group. The move will bring synergy and synchronisation in the business of broking and distribution in the financial services, the company said in a regulatory statement. The financial details of the deal were not immediately available. Sun Life also has a stake in Aditya Birla Nuvo's life insurance business arm Birla Sun Life.

Reliance Money ties-up with Kuoni India for retailing FOREX products

Reliance Money, part of the Reliance Anil Dhirubhai Ambani Group, today announced its strategic business tie-up with Kuoni India. The tie-up was announced by Sudip Bandyopadhyay, CEO, Reliance Money. Under this tie-up, Reliance Money will partner with Kuoni India to set-up Shop-in-Shops at all the Kuoni and SOTC outlets across the country. They will also facilitate Customer Acquisition process of Reliance Money.

The rising foreign exchange revenue from the travel industry is encouraging both the international and domestic segment to expand their business.“The purpose of this tie-up is to provide the customer a convenient and cost effective platform for meeting their FOREX requirements. Our tie-up with Kuoni India will help us provide customers additional convenient locations for completing their FOREX transactions,” said Bandyopadhyay. Reliance Money plans to set up Shop-in-Shops across all the different business segments of the Outbound Division of Kuoni India. These include Kuoni Holidays, SOTC World Famous Tours, SOTC Do-It-Yourself Holidays, SOTC Special Interest Tours and SOTC Holidays of India.

Way2Wealth brokers buys a NBFC

Way2wealth Brokers Pvt Ltd, the equity and commodities broking arm of Bangalore-based Coffee Day Holdings, has acquired a city based non banking financial company (NBFC), Prudential Integrated Finances (PIF). The company was a part of the vehicle financing firm Prakash Leasing. The deal size is not disclosed.

Way2Wealth will use PIF for securities lending. Way2wealth is ready to lend up to Rs 150 crore on its capital base. The funds will be generated trough internal accruals on an incremental basis. The firm also plans to rope in a strategic partner.

Way2wealth plans to grow its business through the acquisition as it is looking at growing its Asset under management (AUM) by 50% during the next fiscal year. It currently manages assets worth Rs 1,000 crore. The firm has also appointed a core team from IL&FS group and the ICICI group to increase its AUM.

There are currently 140 Way2wealth outlets across the country. It plans to increase this number to 200 by the next fiscal. The firm currently offers services such as equity, derivatives, currency futures, commodities trading, IPO's, insurance (life/non-life), mutual funds, portfolio management services & depository services.

Coffee Day Holdings, the parent of way2wealth, is a Rs 800 crore company. The firm is expanding its presence in SEZ developments as well as in the hospitality sector. Besides retailing coffee through its Café Coffee Day outlets across the country, it also deals in exports of coffee.

Aditya Birla completes Apollo Sindhoori acquisition

Diversified company Aditya Birla Nuvo Ltd Monday said it has completed the acquisition of 76 percent stake in the retail broking firm of the Apollo Hospitals Group. The group bought 56 percent in Apollo Sindhoori Capital Investment from the promoters and another 20 percent through an open offer.
The acquired company is a leading player in the financial services sector with over 10 years of experience in the share broking business. It has a network of over 221 own and 687 franchisee branches, and a customer base in excess of 175,000.
'The acquisition not only gives us an opportunity to expand our spectrum of offerings but also presents us a strong customer base, distributor franchise and most importantly an unparalleled talent pool,' said Ajay Srinivasan, chief executive (financial services), Aditya Birla Group.
The group has a presence across various financial services verticals that include life insurance, fund management, among others.
In 2008-09, the financial services business crossed consolidated revenues of $621 million for the first nine months, a growth of over 51 percent from corresponding period last year.