November 2007
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India attracts more US PE funds than China

India has scored over China in terms of total private equity (PE) investments received from the United States over the last eight years, but China is well ahead of India in terms of PE investments this calendar. According to a study by Thomson Financial, “India appears to be emerging as a new favourite among global PE investors. Over the last eight years, it has received $2.51 billion in PE investments compared to $2.4 billion in China. Nevertheless, India still lags in terms of growth as PE investments have grown at a CAGR of 26.7 per cent over the last seven years.” Thomson Financial is an arm of the Thomson Corporation, one of the world’s leading information companies, focused on providing integrated information solutions to business and professional customers. PE investments from the US to China is growing at a compounded annual growth rate of 36.5 per cent (over the last eight years), but private equity investments have grown by 108 per cent (through October 2007) compared to a year ago, the Thomson study said. US PE firms are among the largest investors and play a pivotal role in the growth of such investments in the two Asian countries. Since 2000, these US firms have constituted 96.8 per cent of all PE investments in China and 73.4 per cent in India. […]

ICICI Venture Pays $800 Million for Jaypee Stake

ICICI Venture Funds Management Co., a unit of India's ICICI Bank Ltd., paid $800 million to buy a stake of between 10 percent and 15 percent in New Delhi-based Jaypee Infratech, Business Standard reported, without saying where it obtained the information. The purchase is India's biggest private equity deal, the report said. Jaypee Infratech, a unit of the Jaypee Group, is constructing a 165-kilometer (103-mile) expressway connecting the northern Indian cities of Noida and Agra. (Bloomberg) […]

Nirma to acquire US firm for over $200m

In its first global acquisition that will catapult it into the top 10 global soda ash manufacturers league, Ahmedabad-based Nirma Ltd has announced that it has signed an agreement to acquire US-based natural soda ash producer Searles Valley Minerals Operations Inc and Searles Valley Minerals Inc (collectively known as SVM) from private investment firm Sun Capital Partners Inc and other minority shareholders. Expected to be concluded by January 2008, the acquisition is to be made through a wholly-owned subsidiary of Nirma in US, which is in the process of being set up. While company officials refused to divulge details of the deal citing confidentiality clauses, market sources said the acquisition is being done through an all-cash deal that could cost Nirma in excess of $200 million. The acquisition price is estimated to be at a discount to the $299 million turnover that both the SVM entities raked in last year, sources said. The company is likely to finance the big ticket acquisition by taking upto 50% either on its Indian balance sheet or on balance sheet of the foreign subsidiary. The deal is subject to approval from US authorities. The big ticket acquisition is slated to push Nirma to the top seven producers of soda ash in the world with a total capacity of 2 million tonnes per annum out of the global 48 million tpa capacity of synthetic and natural soda ash. Nirma is the largest producer of synthetic soda ash in India with a capacity of about 1 million tonnes per annum. […]

Punj Lloyd, US PE pick Airworks stake for Rs 100 cr

In the first deal of its kind in the country’s general aviation sector, New York-based private investment firm Global Technology Investment and construction firm Punj Lloyd have bought 33% stake each in Airworks India. Airworks is one of the oldest family-owned aircraft maintenance firms in India. The two investors are putting in close to Rs 100 crore to rejig the Mumbai-based company, that will now broaden its horizon to more areas of aviation infrastructure and services. The Menon family that owns Airworks, will retain the balance 33% stake. Airworks India is India’s largest provider of maintenance services for business aircraft since 1951 with operations at various airports across the country. The firm has Director General of Civil Aviation (DGCA) approvals for over 40 types of aircraft and helicopters. Airworks India director Ravi Menon spoke to ET on the firm’s transition from a medium-sized family-owned business to a larger set-up with the ambition of catering to the entire region. He said: “The aim is to take the business forward without losing out on the passion that the founders have for aviation.” We have chosen two partners who will bring international practices and capital without us losing our identity, he added. […]

Citi Venture picks up 30% in Unimark

US-based private equity fund Citi Venture Capital (CVC) has picked up nearly 30% stake in Mumbai-based bulk drug maker Unimark Remedies for Rs 113 crore. The transaction, one of the largest investments in the pharma sector in 2007 and CVC’s first in the pharma sector, is made through its Indian arm — CVC India. “We have made an investment of Rs 113 crore in Unimark Remedies at a pre-funding company value of Rs 380 crore. It’s a mid-sized company and as PE investors we find value in the investment,” CVC India MD Ajay Relan told ET. When contacted, a Unimark Remedies spokesperson declined to comment. It is learnt that the company is planning to list the company soon. For the year ended March 31 ‘07, Unimark Remedies had reported total revenues of $90 million or around Rs 360 crore. However, the size of the stake that will be diluted is not known. Unimark Remedies is focused on manufacturing speciality active pharmaceutical ingredient (API) in cephalosporins, ace inhibitors, anti bacterials, anti-inflammatory, narcotics, oncology products and controlled substances segments. The company also manufactures advanced speciality intermediates. […]

Jaypee group eyes Bina Power

The cement and construction major Jaiprakash Associates (JAL), a part of Jaypee group, is believed to be in talks with the Aditya Birla group to acquire Bina Power (BPC) in Madhya Pradesh. The 500-MW project has been on the backburner since it failed to make headway in late 90s when investments in the domestic power sector hit a trough due to unhealthy state electricity boards across the country. The group sold Rosa project in UP to Reliance Power in 2006. Rosa has tied up with a consortium of financiers led by IDBI to mobilise Rs 2,162 crore for the first phase of its 1,200 MW power project. The coal-based Bina project will require almost Rs 2,000 crore investment to set up 500-MW plant. Sources said JAL is interested in doubling the capacity to 1,000 MW, if the state government gives necessary approvals. The MP government would be ready to allocate coal blocks for the plant, said sources. “For the project, the Madhya Pradesh government has acquired land and given all necessary clearances. BPC, the shell company which owns the assets, will be transferred to JAL after the acquisition. The value of the deal would be just the investment already made at the location and the premium,” said sources in the know. Both Birla group and JAL have declined comment on the proposed deal. […]

Askar, SKIL to float private equity fund

The Iceland-based investment bank, Askar Capital on Tuesday said it has plans to float a $500 million private equity (PE) fund with Nikhil Gandhi-promoted Sea King Infrastructure (SKIL). Both Askar Capital and SKIL will hold 50% stake each in the fund. Askar Capital, CEO, Tryggvi Herbertsson, said the fund would capitalise on a diverse and exciting range of investment opportunities in India and the wider South-East Asian Region. Both firms will contribute to managing private equity investments. The private equity platform will operate within a multi-sector framework, looking to aggressively commit capital in particular to small-and medium-sized enterprises. Both Askar Capital and SKIL have already identified a healthy pipeline of investment opportunities in the region. “Private equity is a core business area for Askar Capital globally. Our investment strategy in India will primarily be in the domain of real estate, infrastructure and private equity. Our fund with the SKIL group is a step to move in this direction. The setting up of this private equity platform in India is another important step for us in growing our business in this region,” Mr Herbertsson said. […]

S Kumars may bring PE into demerged Reid & Taylor

Textile firm S Kumars Nationwide (SKNL) has approved the demerger of its division Reid & Taylor, into a subsidiary of the parent company. Reid & Taylor has been operating as a division and is in the business of luxury textiles and ready-to-wear garments. The new subsidiary, Reid & Taylor (India), will focus only on the rapidly growing brand ‘Reid and Taylor’ – a luxury brand for men and will encompass the entire spectrum of male attire and presentation, the company statement added. This arm will benefit from a sharper business focus as a business entity and is aimed to consolidate Reid & Taylor’s position at the higher end of the textile business, SKNL added. This subsidiary will capture a bulk of this rapidly growing, high profit margin segment. SKNL also has plans to bring private equity investors in the demerged entity before going in for an IPO, it said. (ET) […]

DLF to buy Aman Resorts for $400 mn

DLF Ltd, the largest real estate developer in India, has announced its equal partnership with Aman Resorts, to enter into definitive agreements to acquire a controlling interest in the Aman Resorts Group. The entire transaction, when completed, is estimated to be valued at $400 million with an assumed debt of approximately $150 million. Aman Resorts is one of the world's leading hospitality and lifestyle businesses and currently owns and operates 22 luxury hotels, many with residences, in 12 countries. Several of the properties, such as the famed Amanpuri in Phuket and Amandari in Bali have received numerous awards over the years. In addition to expanding its resort locations, Aman Resorts is developing projects in key gateway cities around the world, the first of which is scheduled to open in New Delhi, India, in 2008. It has ambitious growth plans with many new properties in various stages of development. […]

Canaan set to expand in India

Canaan Partners, the two-decade old, US-based early stage venture capital firm with $2.5 billion under management is planning to raise its eighth fund, targeting a corpus of $650 million. The seventh fund from which the VC is presently investing is $450 million. The company, which styles itself as venture catalysts, has been increasing its exposure in India and has so far understood to have committed close to $50 million in four companies during the past year and half, including investment in and Canaan India head Alok Mittal confirmed that Canaan is in the process of a new fund of around $650 million and added that the India team is being expanded to handle the hike in the deal flows. “We do not have a target of how much we will have to invest in India, but we are certainly looking for more opportunities,” Mittal added. The move by Canaan to raise its next round comes close on the heels of venture firms like Matrix India Partners, Sandalwood […]