November 2007
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PE player Sequoia invests Rs 100cr in GVK Bio

Global private equity player Sequoia Capital has invested Rs 100 crore in Hyderabad-based contract research organisation GVK Biosciences. The investment comes close on the heels of Sequoia picking up an 18% stake in Hyderabad-based CRO SAI Advantium, signaling the PE major’s interest in the contract research space. GVK Biosciences plans to use the money to fund acquisitions in the CRO space and also add to its existing capacities. “We are looking at targets both in India and abroad for expanding our work. Low-cost destinations are not a priority for us because we are open to making acquisitions even in the US and Europe,” GVK Bio president Manni Kantipudi told ET. According to him, the acquisitions would be made to compliment the company’s existing activities in the pre-clinical and clinical research areas. [...]

Deloitte survey says private equity short-term outlook cools

Private equity (PE) investors have become bearish on returns, according to a half-year survey conducted by private equity advisory group Deloitte Corporate Finance Services India Pvt. Ltd among 40 PE firms across September and October. A majority (52%) expected returns to decrease in the next six months compared with 23% in their survey for the first half of 2007. One survey respondent, who was not named, qualified this concern by saying: “Investments made two or three years ago that exit in the next six months will do very well. More recent vintages will see more muted returns.” Also, one in five respondents expected a decrease in new funds being raised for India. No respondent expected a slowdown in investment activity The slight cooling down in PE market sentiment largely comes from the rise in the number of PE funds in India— a phenomenon that has raised company valuations. Increasing competition has also caused PE firms to focus more on the factors that differentiate them as companies look for more than money. Despite the outlook on returns, none of the respondents expected a slowdown in investment activity (65% expected increased activity versus 84% in the last survey). [...]

Orient Global buys 22.5% stake in India Infoline`s arm

India Infoline announced the approval of an equity investment of USD 76.7 million (approximately Rs 3 billion) into its consumer finance subsidiary India Infoline Investment Services (IIIS) by the Singapore-based investment institution Orient Global, which will acquire a 22.5% stake. The capital will be primarily utilized for the expansion of IIIS`s subsidiaries, Moneyline, which is in the business of personal and auto loans, and India Infoline Housing Finance, which is in the business of home loans. Moneyline will make use of the group`s expansive network of 600 branches to provide credit to a large segment of the populace which currently does not have access to organized credit. Moneyline plans for an active presence in 60 cities by the end of 2008. With a combination of decentralized distribution and service, supported by centralized risk management and back office operations, Moneyline aims to leverage technology to reduce costs, deliver superior service and offer a pleasant overall borrowing experience to the customer. [...]