February 2008
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PE deals outnumber M&A transactions in Jan 2008: Study

Private equity placements are finding favour with India Inc with the number of such transactions surpassing that of merger and acquisition deals in the first month of this year. Indian companies announced as many as 60 private equity deals as against 56 M&A transactions, according to the data compiled by global consultancy firm Grant Thornton. However, the total value of PE deals was lower at 2.05 billion dollars compared to $3.01 billion in M&As transactions. During calendar year 2007, the total number of M&A deals announced stood at around 661, while there were as many as 386 private equity deals during the same period. The major M&A deals in January this year were Tata Chemicals Limited's acquisition of US-based General Chemical Industrial Products Inc, and Great Offshore's acquisition of SeaDragon Offshore. […]

PE players see more `realistic valuations`

With the secondary market witnessing a 25 per cent correction in January, private equity players are expecting valuations to become more realistic in the late-stage investments in India Inc, at least during this calendar year. The performance of secondary markets always acts as a benchmark for PE players to pump capital investment into a private company, or even a publicly listed company. Despite the unprecedented rally in the markets in the past few years, the share of PE investments in listed companies has shown a decrease since 2004. The PE investments in public enterprises (PIPEs) amounted to $4.2 billion across 80 deals, against a total PE investment of $17 billion, last year. […]

Event seeks to marry small and medium enterprises with PE cos : Livemint

On Saturday, Goa State Industries Association (GSIA) and private equity (PE) firm Lauris Capital Partners (HK) Ltd held the first of a two-part event to educate small and medium enterprises (SMEs) on PE and help them access investors. The event, Introduction to Private Equity and Private Equity Investment Process, preceded India Private Equity Fair, where 25 companies looking for investments ranging from $10 million to $200 million (Rs40 crore to Rs800 crore) will be on showcase to PE firms at Mumbai on Wednesday. These events are significant, because typically it is venture capital investors who hold showcases and workshops for start-ups. It seems that PE investors are working harder to access SME deals. And they are realizing that SMEs need a similar level of hand-holding through the investment process as start-ups, because they don’t have exposure to PE investors, nor the budget to educate themselves via investment bankers or consultants. This may be the start of a trend to help bridge the gap between SMEs (particularly in smaller Indian cities) and investors. On Saturday, 55 people listened as Hong Kong-based Harshawardhan Sabale, founder and head of Lauris Capital Partners, which does SME buyouts in India, demystified how funds are set up, how fund managers get paid and how they make investments. […]

ICICI venture, JP Infra PE deal is off

What could have been one of the largest private equity deals in India has come unstuck. ICICI Venture and Jaypee Infratech have terminated negotiations for the PE player buying close to 10-15% stake for $800 million in the infrastructure company, which is developing project worth Rs 1 lakh crore. The deal could have given Jaypee Infratech a valuation in excess of Rs 30,000 crore. “ICICI Venture is not investing in Jaypee Infratech. We were looking at getting a strategic investor in the firm, but have put our plan on hold for now,” Jaiprakash Associates (JAL) executive chairman Manoj Gaur told ET. Jaypee Infratech is a wholly-owned subsidiary of JAL and the original plan was for investors to acquire 44% stake in the company through allotment of new shares. But now JAL plans to invest up to Rs 440 crore to acquire 44 crore equity shares of Rs 10 each at par, in one or more tranches in Jaypee Infratech. The additional shares JAL is subscribing were originally meant for strategic investors, Mr Gaur said, adding that “since the strategic investment has been put on hold, JAL has initiated action to subscribe to these shares.” […]