January 2008
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Dish TV sells 4.9% stake for Rs 2.5 bn

Dish TV India announced that it sold 4.9% stake in the company to a Mauritius-based private equity firm, Indivision India Partners, promoted by Kishore Biyani`s Future Capital Holdings, for Rs 2.5 billion, reports Business Standard. Dish TV will make a preferntial allotment of 12.5 million equity shares of Rs 1 each at a price of Rs 100 each aggregating Rs 1.25 billion. Indivision will also subscribe to 9,615,385 warrants, which will be converted into equity at Rs 130 a share, 18 months later. The sale proceed will be used to expand Dish TVs operations. The company is planning to raise over Rs 10 billion in the next two years for expansion. [...]

FIs pick up 10% in Piramal arm Peninsula Land

Foreign investors such as Franklin Templeton, HSBC, ABN Amro have picked up around 10% stake in the Ashok Piramal group’s real estate arm, Peninsula Land (PLL) for Rs 525 crore. The new equity holders purchased PLL stake through a qualified institutional placement (QIP) route. The deal values the Ashok Piramal group company at just over Rs 5,000 crore. The transaction is expected to cut the promoter holding in Peninsula to 52.54% from 62.3%. UBS Capital and Enam Capital advised the company on the transaction. PLL executives said that the money will be used for land acquisition and construction of new projects. PLL was among the first companies to use old Mumbai textile mill land to enter the property development business, a move which has triggered a frenzy of mall building and corporate high-rises in that part of Mumbai. [...]

VC funding set to be billion dollar baby in 2008

The year 2008 is slated to be an interesting year for entrepreneurs and venture capitalists alike. With a mobile subscriber population of over 200 million and a growing internet penetration base, growing middle class and over 70 million TV and satellite homes, entrepreneurs are coming up with innovative ideas and VCs are not stopping short of funding them. In 2007, VC funding in start-ups in India just stopped short of $900 million. In 2008, the VC industry is slated to become worth over $1 billion. And interestingly, it will not be run-of-the-mill IT services. In fact, in a distinct shift, VCs will shy away from investing in IT outsourcing and BPO start-ups due to the rise in value of the rupee. However, consumer businesses revolving around online education, personal gaming, mobile advertising and payments businesses will gain momentum, thanks to the great Indian middle class. Tax breaks to IT and BPO companies are ending in 2009. Unless that gets revived in the Budget this year, VC investments in the tech outsourcing start-ups will decline. [...]

Advanta India acquires Unicorn Seeds

Advanta India Ltd has acquired the business of Unicom Seeds Ltd (“Unicom”) by acquiring 100% shares in the company for a consideration that includes deferred payment based on achievement of performance related milestones. Unicom has a strong presence in the domestic and export markets of vegetable seeds. Unicom also undertakes the custom production of vegetable seeds for the customers all around the globe. The revenue size of the business of Unicom for the last FY was about Rs250mn. The business has the EBITDA earning capacity of about 30%. With this acquisition, Company's platform in vegetable seeds will become stronger with added crops to its current vegetable product portfolio (Golden). With the added products like Melons and Cucumber from Unicom the combined vegetable portfolio (Golden and Unicom) will make Company a significant player in the Vegetable seed Market. [...]

VC funds to globalise further

Venture capital is a fledgling industry today and I do not expect that to change materially in 2008. It is an industry which contributed less than $1 billion in the year gone by. Given the fact that it is coming off such a small base, it will not be surprising if it grows by 50%. Venture capital-backed companies, however, would still be a small proportion of country’s GDP. This industry has seen a large influx of capital from one of the world’s most sophisticated investors, the ivy league universities. They will continue to increase their allocation to venture capital, especially in emerging markets like India. The Indian venture capital industry that has so far been largely funded by the US will see an influx of funds from Europe and Asia in this year. As companies globalise to look for new markets and build efficient supply chains, venture capital will continue to globalise even further. Venture firms originating from mature economies like the US will set up or strengthen their operations in India. [...]

Citigroup PE marks $1.8 bn for India investment in 2008

The PE flood is in full spate. If the last year set a record of sorts at $17 billion of inflows, then this year might reset all the records once more. CVC International, the private equity arm of Citigroup, which invested more than a billion dollars in the country in 2007, is planning to up the ante. “We should be able to invest at least $1.8 billion in 2008,” says CVC International MD Ajay Relan, who also heads India operations. PE conjures up images of ruthless leveraged buyouts that are giving to rise to regulatory concerns worldwide. “The reality is that Indian PE is totally different, said PR Srinivasan, who has just been made MD at CVCI. “The LBO approach works in the West where business growth rates are marginal and private equity returns come from financial engineering and restructuring (restructuring is another word for “job losses”). “In India PE is about growth and job creation. When we invested in Suzlon four years ago, the business employed 950. Today, the company employs more than 10,000 in India and 12,000 worldwide,” said Srinivasan. [...]