February 2008
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PEs go `clubbing`

After the Bharti Infratel deal, India could see more group approach in PE investing. Private equity firms in India are going `clubbing’. Earlier this month, eight private equities, led by Temasek Holdings, an investment arm of the Singapore government, decided to band together to invest around Rs 4,800 crore in Bharti Infratel, the tower arm of the Bharti Group. While a group approach in investment is not unusual in the private equity space (Temasek itself had invested in Matrix with Newbridge), the latest deal, which valued Bharti Infratel at Rs 40,000-50,000 crore, stands out for two reasons: first, an eight-way deal is a rarity all over the world; and second, it was the largest `club deal’ by private equities in India. While Temasek put in Rs 2,000 crore, US private equity firm Kohlberg Kravis Roberts & Co put in Rs 1,000 crore and the other six put together committed the balance Rs 1,600 crore. The six firms are the Investment Corporation of Dubai (ICD), Goldman Sachs, Macquarie, AIF Capital, Citigroup and India Equity Partners (IEP). […]

Opto to buy US co in $70 million deal

Bangalore-based healthcare equipment manufacturer Opto Circuits India has announced that it will acquire US-based Criticare Systems in a deal valued at $70 million. Opto has signed a definitive agreement with the US company on the same, the company told the Bombay Stock Exchange. US-based Criticare Systems, which posted sales of $31 million for the year ended June 2007, is in the business of manufacturing vital sign monitors, anaesthesia monitors and pulse oximeters. For the quarter ended December 2007, Opto Circuits posted turnover of Rs 127 crore. Opto Circuits’ product range includes pulse oximeters, pulse oximeter sensors, fluid warmers, cholesterol monitors and stents. It has a manufacturing and R&D facility in Bangalore. […]

VC funds jittery on Budget-eve

The venture capital sector is jittery as Budget 2008 draws near. VCs, especially the domestic ones, were in a state of lethargy since Budget 2007, when ‘pass through’ status was granted only to investments in specific IT and biotech areas. And the plan to bring overseas M&As involving Indian companies under the tax net, that too with retrospective effect from June 1976, is making them even more worried. “Taxing M&As will be a very retrograde step. The world now sees us as a developed economy and we should behave in that manner. It will be totally unfair to tax M&As, that too in retrospect,” says president of TiE Delhi Saurabh Srivsatava. “The government should also restore the pass through status as it was earlier, as it does not make any material difference to tax authorities. But, for the industry, it’s making a complete mess,” he adds. Another thing worrying the VCs is the government’s move to ‘plug loopholes’ in the Mauritius DTAA (Double Taxation Avoidance Act) because all their acquisitions/investments in India are routed through Mauritius. Many major VCs, like Canaan, Helion, Clearstone and Sequioa, invest in India through routes like Mauritius. According to estimates, VCs invested about $900 million through this route till last year. Other tax havens with which India has a treaty are Cayman Islands, Singapore and more recently Luxembourg. […]

Cleartrip gets $18.5 million investment

Cleartrip Travel Services Pvt. Ltd has received a third round of funding of $18.5 million (Rs73.58 crore), which brings the total investment in the Mumbai-based travel company to $30.2 million. Venture capital firm Draper Fisher Jurvetson India Advisory Services Pvt. Ltd (DFJ) led the round with a $10 million investment—the firm’s largest in India. DFJ was joined by the Mahindra Group and all the four firms that had previously invested in Cleartrip. India’s travel portals have received a flurry of investment over the past two years since the sector came up in 2005. Since then, the industry has been moving towards consolidation, though the top players are yet to turn profitable. With this investment, Cleartrip joins New Delhi-based Makemytrip India Pvt. Ltd which also got a third round of funding in August. Both are aiming for profitability in 2008 and are on the road to an initial public offering in the next two years. India’s travel portals have received a flurry of investment over the past two years. […]

DE Shaw to invest $250 million in HDIL group company

Real estate firm Housing Development & Infrastructure (HDIL) on Wednesday said the private equity firm DE Shaw is investing $250 million in Mack Star Marketing, an HDIL group company. Mack Star Marketing holds development rights for a 54,000-metre commercial complex being constructed in Andheri. Last week, HDIL had transferred its development rights to this complex to Mack Star for Rs 900 crore. DE Shaw’s investment is in the form of equity and debt. HDIL managing director Sarang Wadhawan said DE Shaw will hold a minority stake, but declined to give details. The investment comes at a turbulent time for India’s capital and real estate markets. The steep meltdown in January and the withdrawal of Emaar MGF’s IPO in February rattled real estate firms who rely on equity to fund their expansion projects. […]

Dabur Pharma weighing PE partner, outright sale

The Dabur Group is learnt to be evaluating a range of options for determining the future direction of Dabur Pharma, the anti-cancer drug company, including a sellout. The options being considered include inducting a private equity investor or a strategic investor, as well as a strategic alliance with a foreign company. It is understood that Dabur Pharma has held discussions with a German pharma company for a partnership, where the possibility of an outright sale has also figured. While Dabur Pharma chairman Mohit Burman was unavailable for comment, CEO Ajay Vij said, “There is no move to induct any partner.” Asked if the company was in touch with any German company for a strategic alliance, he said, “We are in touch with many companies across the globe for hundreds of things, but this (induct a partner or selloff) is pure speculation.” However, a reliable industry source told ET that at present several options are being considered, though no final decision has been taken. A source close to the German company said discussions were at a somewhat advanced stage and the possibility of a total sellout was being actively considered. […]

Pvt equity funds betting big on Kolkata

Foreign private equity funds are queuing up for biting into the city's burgeoning real estate pie. Over the past 18 months, several large PE transactions have been concluded, in addition to an enterprise level hospitality exposure by Credit Suisse in Park Hotels. The inflow of organized private equity began with New Vernon taking exposure in an IT building project developed by Sureka Group in association with Bikram Dasgupta's Globsyn. UK REIT then invested a significant amount in residential projects being developed by the Eden group. The largest private equity exposure in terms of project size came from Starwood Capital and Walton Street into a 150 acre mixed use project being developed by the Sriram group in Hindustan Motors near Uttarpara. Both have pumped $50 million each into the development. “The PE funds have been scouting the turf for the last three years. We are very happy to witness that they are now concluding transactions and deploying money into projects,” said Abhijit Das, regional director, Jones Lang LaSalle Meghraj, the largest real estate consultancy firm in the country. […]