November 2007
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Mittal eyes 50% stake in HPCL subsidiary

Steel baron Lakshmi N Mittal is in talks with financial institutions to buy out 50 per cent in Hindustan Petroleum Corp’s exploration arm Prize Petroleum, sources close to the development said. The size of the deal is said to be about Rs 200 crore. Mittal has made rapid advances in the oil business in India this year first with a 49 per cent stake in HPCL's Bhatinda refinery and then partnering the state-run firm for another refinery on the east coast. “He has looked at a few firms but nothing is finalised just now,” sources said. Besides Mittal, Essar Oil, Jaiprakash Associates and L&T are other firms interested in buying a 50 per cent stake in Prize Petroleum. [...]

PE investors pour money into virgin sectors

IT, manufacturing, banking and engineering undoubtedly are still the favourites as far as private equity investors are concerned. However, over the past nine months “shallow sectors” like agriculture, energy, hospitality, telecom and media are gaining importance among bulge-bracket investors. “A standing testimony to this aspect is the fact that even a slow-moving sector like agriculture has pocketed $29 million by way of three separate deals. Agro products and agriculture-based research companies are attracting investors,” said Arun Natarajan, managing director, Venture Intelligence, a Chennai-based PE research firm. Among other investments, in the energy sector, PE parties have invested close to $252 million across 11 deals over the past nine months. The $68 million joint equity placement of Citigroup and UTI Ventures in Ind Bharat Infrastructure, IFC’s $30 million investment in Gujarat State Petronet and the $24 million joint investment of NYLIM India and WIH Holdings are some of the major PE deals in the energy sector during the considered period. According to a sectoral outlook report put out by the International Energy Agency, China and India will account for around 45% of the increase in global primary energy demand through 2030. [...]

Lehman Brothers to pick up 10% in Ramky for $100 mn

NYSE-listed Lehman Brothers is set to pick up around 10% in Ramky Group for $100 million (Rs 407 crore), the latest instance of Indian realty benefiting from private equity (PE) funds. Ramky Group is a Hyderabad-based infrastructure and realty company promoted by Ayodhya Rami Reddy. It has a turnover of around Rs 1,600 crore. Lehman Brothers is a diversified, global financial services firm with branches across the world. Ramky Group is set to use part of the funds to expand the operations of its wholly-owned subsidiary —Ramky Enviro Engineers— in India and overseas. The balance will be used to finance overseas acquisitions. Ramky Enviro Engineers specialises in bio-medical waste management, oil recovery and metal recycling. “We are looking at expanding operations in the Middle East and Singapore, besides India. We are also open to acquiring mid-sized companies in Singapore and the Middle East,” said a company official. [...]

Baseline to invest $100 mn in India

Foreign private equity funds are betting big on India to cash in on the investment boom in sectors ranging from realty to technology. New York-based Baseline, a private equity firm, is the latest entrant after biggies such as Blackstone, Goldman. The PE firm is set to invest $ 50-100 million to fund realty, infrastructure, power, retail and technology companies. The investments are expected to flow in a year’s time. It is also open to picking up an equity stake in mid sized companies. “We are eyeing power generation, real estate, infrastructure, life science and technology based knowledge process outsourcing (KPOs) firms,” said Baseline, partner and founder, Brooks Schaden. Baseline will initially target medium sized companies that have a strong business model. [...]

Sweden's Securitas buys stake in India's Walsons

Swedish security services firm Securitas said on Friday it had signed a deal to buy a 49 percent stake in Indian peer Walsons as part of its strategy to grow in Asia. Securitas said in a statement on Friday it would pay 107 million Swedish crowns ($17 million) for the holding. “The Indian security services market is estimated to be worth about 3,000 million crowns and is expected to grow by at least 20 percent annually in the coming five years,” Securitas said in a statement. It said Walsons is the fourth largest Indian security services company with annual sales of 76 million crowns.(Reuters) [...]