June 2007
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Patni nears $25 mn European buy

IT major Patni Computer Systems is close to acquiring a European IT company for $20-25 million (around Rs 100 crore) and is expected to announce the deal in the next two months. The acquisition gains importance as two private equity majors – Apax and Carlyle – are in advanced stages of discussion to acquire a 20 per cent stake in the Indian IT major from two of its largest shareholders — Ashok Kumar Patni and Gajendra Kumar Patni — who together own about 29 per cent. [...]

iLabs invests Rs 42 cr in VSoft

iLabs Private equity fund, a $300 million India-centric fund promoted by former COO of Satyam Computer Systems Srini Raju, has invested Rs 42 crore (over $10 million) in VSoft Corp. VSoft executives were, however, not available for comments. VSoft is a global information technology and solutions provider of cheque imaging and data management software. [...]

PE funds begin to realize large potential of smaller companies

Small and medium-sized enterprises (SMEs) have begun to attract more attention from private equity (PE) investors looking to bet on what they view as small shops with large potential. Specialized SME funds worth nearly $500 million (Rs2,050 crore) have been raised or announced for the Indian market in the past 12 months, and this money will be deployed over the next three-five years. SMEs—companies whose average revenues are between Rs50 crore and Rs200 crore per year—are somewhat under-served by PE investors. Most investors active in India play either in the start-up and early-stage space or in the large-cap (market capitalization) segment. Deal sizes in the SME space look similar to most large-cap PE deals done in the Indian market at present—mostly in the $5-15 million range. But the similarity ends there. [...]

Private equity firms stepping up interest in consumer businesses

Private equity firm Avigo Capital Partners has typically invested in companies that make vaccines, hoses and semiconductors. Now, it has invested in the youth garment brand Spykar Lifestyles Pvt. Ltd, thereby joining the club of PE investors eager to tap consumer-driven businesses. This is New Delhi-based Avigo’s first investment in a consumer business; 25% or $31 million (Rs127.1 crore) of its $125 million India-specific Avigo SME Fund II will go to this segment. In all of 2006, consumer-driven businesses accounted for 17.17% or $391 million of the total $2.27 billion PE investments received by Indian companies, according to US-based financial data provider Thomson Financial. In the first half of this year alone, $275 million in growth capital has already gone to 13 consumer-driven companies—making it 20% of overall deal spend. [...]

Temasek bought 10 per cent of Tata Sky

Temasek Holdings is going big into India’s technology scene via conglomerate Tata Group. According to reports in the Indian press over the weekend, the Singapore investment firm has bought 10 per cent of Tata Sky for US$56 million ($86.3 million), scoring its third major investment in the Tata group to date. An Indian newspaper, The Economic Times, said on Sunday that the stake was “recently diluted” by Tata Group, whose original interest in Tata Sky — a direct-to-home television operator — was 80 per cent. [...]

Real estate sector may see only $1.2 bn in private equity this year

India’s real estate sector may see only as much as $1.2 billion (Rs4,920 crore) in private-equity deals by the end of this year, as investors opt to spread their investment over several years, mirroring the duration of the projects, and belying expectation that billions of private capital will be used up this year alone. That’s barely 20% of the estimated $6 billion queuing up to invest in the real estate market during the current year, with more than a dozen private equity firms scouting for investment opportunities. [...]