For the first time, private equity (PE) investments in India have crossed the $10-billion mark in a calendar year. And that too, with over three months still to go in 2007. The magnitude of the growth can be gauged by the fact that in 2006, the total value of PE deals announced stood at $7.86 billion.
With the PE industry on fire and with strategic mergers & acquisitions (M&A) building on the big-budget deals struck early this year, the total value of equity deals involving Indian companies is now nudging the $60-billion mark.
For the January-August period, the total value of PE deals announced stood at $10.8 billion spread over 267 deals, according to the latest dealtracker of advisory firm Grant Thornton. PE funds have been flexing their muscles in equity transactions in the country, and even surpassed strategic M&As in the value of deals struck during June and July.
In June and July, PEs totalled $4.6 billion while M&As were valued at $2.66 billion. But in August, M&As clawed back with the cumulative value of deals pegged at $3.37 billion over 62 deals compared to $1.22 billion worth of PE deals through 30 deals.
Some of the large M&As last month include JSW Steel's acquisition of three US-based steel units, Wipro's takeover of Infocrossing and First-source Solutions' acquisition of MedAssist Holding. The total value of strategic M&As during January-August crossed $48.4 billion through 460 deals.
Cross-border deals continue to outpace domestic M&As as in the re-cent past. There were a total of 30 domestic deals with an announced value of $660 million as against 32 cross-border deals worth $2.71 bil-lion.
The cross-border M&As in turn are being led by outbound deals i.e., deals where Indian companies are acquiring global companies. There were a total of 21 outbound deals worth $2.33 billion in August as against 11 inbound deals, cumulating to an announced value of $380 million.
Some big PE deals recorded last month include Blackstone's buyout of Gokaldas Exports and its minority stake in Nagarjuna Constructions. In addition, there were a clutch of investors acquiring minority stake in the telecom infrastructure unit of Reliance Communications apart from Apax Partner's deal for Apollo Hospitals and a group of PE funds picking stake in real estate and infrastructure management company Indu Projects.
(source: Economic Times)
Showing posts with label PE. Show all posts
Showing posts with label PE. Show all posts
Monday, September 17, 2007
Tuesday, September 11, 2007
Private equity funds need level playing field in India to grow
Although 2007 is likely to be another landmark year for private equity (PE) in India, the level of PE activity, currently estimated at around $10 billion, could increase and needs to increase multifold given India’s current GDP growth.
To achieve this, regulations and taxes need to improve and the PE community needs to project itself in the market that it is a source of finance that contributes to the growth plans of entrepreneurs, helps generate employment and improves corporate governance.
Having said this, PE financing is steadily gaining more acceptability amongst Indian promoters. This indicates a ‘leap of faith’ for closely-held traditional Indian family-owned and managed businesses, which until a few years ago, had viewed private equity financing as a possible interference in their business.
The recent investment by Blackstone in Bangalore-based garments company Gokaldas Exports demonstrates this leap of faith. Blackstone has acquired a controlling stake from the owners.
This transaction symbolises a traditional promoter-family run business partnering with a large private equity fund to accelerate its growth plans. This transaction demonstrates that Indian promoters are recognising the value that a PE brings to the partnership and PE investors are being viewed as ‘partners’ to the business.
In the backdrop of increasing competition for deals, some PE funds bring immediate value to Indian promoters at the negotiating table. For example, in the BPO industry, value is brought to the negotiating table by offering to introduce existing US or Europe-based investee companies who could be interested in offshoring, thereby providing an immediate growth opportunity to the Indian business.
Since 2002, PE inflows to India have witnessed a compounded annual growth rate of 67%. PE inflows during the first seven months of 2007 stood at $6 billion, which is already close to surpassing the $7.9 billion invested during the whole of 2006. However, what is more important for
PE is that the past two years have confirmed that the Indian market provides the liquidity to help PEs exit from their investments. Reports suggest that between January 2004 and June 2007, PE and venture capital funds exited 160 companies, 110 through sales and 50 through IPO.
(source: Economic Times)
To achieve this, regulations and taxes need to improve and the PE community needs to project itself in the market that it is a source of finance that contributes to the growth plans of entrepreneurs, helps generate employment and improves corporate governance.
Having said this, PE financing is steadily gaining more acceptability amongst Indian promoters. This indicates a ‘leap of faith’ for closely-held traditional Indian family-owned and managed businesses, which until a few years ago, had viewed private equity financing as a possible interference in their business.
The recent investment by Blackstone in Bangalore-based garments company Gokaldas Exports demonstrates this leap of faith. Blackstone has acquired a controlling stake from the owners.
This transaction symbolises a traditional promoter-family run business partnering with a large private equity fund to accelerate its growth plans. This transaction demonstrates that Indian promoters are recognising the value that a PE brings to the partnership and PE investors are being viewed as ‘partners’ to the business.
In the backdrop of increasing competition for deals, some PE funds bring immediate value to Indian promoters at the negotiating table. For example, in the BPO industry, value is brought to the negotiating table by offering to introduce existing US or Europe-based investee companies who could be interested in offshoring, thereby providing an immediate growth opportunity to the Indian business.
Since 2002, PE inflows to India have witnessed a compounded annual growth rate of 67%. PE inflows during the first seven months of 2007 stood at $6 billion, which is already close to surpassing the $7.9 billion invested during the whole of 2006. However, what is more important for
PE is that the past two years have confirmed that the Indian market provides the liquidity to help PEs exit from their investments. Reports suggest that between January 2004 and June 2007, PE and venture capital funds exited 160 companies, 110 through sales and 50 through IPO.
(source: Economic Times)
Thursday, September 6, 2007
PE biggies line up for ICICI pie in Infomedia
Private equity funds General Atlantic, Blackstone and Warburg Pincus have shown interest in ICICI Venture’ 63% stake in Infomedia (formerly Tata Infomedia), the publisher of business directory Yellow Pages and some well-known niche magazines.
Given the fact that whoever buys the stake will have to make an open offer and also pay a controlling premium, the buyer should sell out upwards of Rs 400 crore. Infomedia’s market capitalisation is Rs 474 crore and its shares closed at Rs 240 at the BSE on Wednesday.
When contacted, the ICICI Venture spokesperson said, “We don’t comment on market speculation.” Infomedia India CEO Prakash Iyer could not be reached despite repeated attempts.
ICICI Venture acquired Tata’s 50% stake in Infomedia India in 2003 for Rs 123 core. It later acquired an additional 13% through an open offer.
Infomedia, with annual revenues of Rs 143 crore, is best known for its business directory service, the Yellow Pages. Tata Press, when it owned Infomedia, launched the Tata Press Yellow Pages in Mumbai and soon took the Yellow Pages culture to more than 20 cities across India.
An industry source pointed out that PE firms have shown interest in the company for its publishing outsourcing business and the growth it offers. The size of the publishing vertical in the BPO space is around $250 million.
Infomedia entered this business in December 2005 through the acquisition of Bangalore’s Cepha Imaging Systems and UK-based publishing company Keyword Group. The idea was to scale up operations, forge partnerships with international publishers and take advantage of India’s cost structure.
(source: Economic Times)
Given the fact that whoever buys the stake will have to make an open offer and also pay a controlling premium, the buyer should sell out upwards of Rs 400 crore. Infomedia’s market capitalisation is Rs 474 crore and its shares closed at Rs 240 at the BSE on Wednesday.
When contacted, the ICICI Venture spokesperson said, “We don’t comment on market speculation.” Infomedia India CEO Prakash Iyer could not be reached despite repeated attempts.
ICICI Venture acquired Tata’s 50% stake in Infomedia India in 2003 for Rs 123 core. It later acquired an additional 13% through an open offer.
Infomedia, with annual revenues of Rs 143 crore, is best known for its business directory service, the Yellow Pages. Tata Press, when it owned Infomedia, launched the Tata Press Yellow Pages in Mumbai and soon took the Yellow Pages culture to more than 20 cities across India.
An industry source pointed out that PE firms have shown interest in the company for its publishing outsourcing business and the growth it offers. The size of the publishing vertical in the BPO space is around $250 million.
Infomedia entered this business in December 2005 through the acquisition of Bangalore’s Cepha Imaging Systems and UK-based publishing company Keyword Group. The idea was to scale up operations, forge partnerships with international publishers and take advantage of India’s cost structure.
(source: Economic Times)
Thursday, May 31, 2007
India Equity Partners Buys APIDC VC's Stake In Ocean Sparkle
Private equity fund India Equity Partners (IEP) has picked up an undisclosed stake in Ocean Sparkle lTD, a Hyderabad-based port management company, for $18 million, reports The Economic Times. IEP has bought the stake held by APIDC Venture Capital in the company, which, according to ET, is probably at a valuation of $100 million. The founders of the company had the first right of refusal to buy the stake from APIDC Venture Capital, but did not exercise the right since the valuation was "high".
Contributor: Amit Sharda
Contributor: Amit Sharda
IFC To Invest In Aloe Environment Fund And Samara Capital
International Finance Corporation(IFC), the multilateral investment arm of the World Bank, has decided to invest in two India focussed private equity funds - Aloe Environment Fund 2 (Aloe 2) and Samara Capital Partners Fund I Ltd (Samara Capital).
IFC has proposed to invest €15 million ($20 million) in Aloe & up to $10 million in Samara.
Contributor: Amit Sharda
IFC has proposed to invest €15 million ($20 million) in Aloe & up to $10 million in Samara.
Contributor: Amit Sharda
Wednesday, May 30, 2007
Yes Bank launches $100 mln private equity fund
Yes Bank has launched a $100 million private equity fund to invest in food and agriculture sectors. The Food and Agribusiness India Fund plans to invest its entire amount in 1-2 years, earmarking $5-7.5 million per company and expects an average annual return of 20-25 percent.
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