March 2008
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Alok Industries to take 50% stake in Ashford Infotech

Indian textile firm Textile Alok Industries Ltd has taken a 50% stake in Ashford Infotech, a part of the Ashford Group, for the joint development of real estate projects. It has acquired the stake through wholly owned subsidiary Alok Infrastructure, it told the Bombay Stock Exchange. The venture has already purchased the Bhandup land of tyre maker Ceat Ltd, measuring around 6.92 acres for around INR1.30bn (US$30m) as its first property development. According to a report today (13 March) by news agency Reuters, the JV will build a number of offices and set up a 183-acre textile special economic zone in Silvassa.(Just Style) […]

PE firm Warburg Pincus to sell part of stake in Dainik Bhaskar

An investment arm of global private equity firm Warburg Pincus Llc. plans to sell a portion of its equity stake in DB Corp. Ltd, which owns India’s second largest Hindi daily Dainik Bhaskar, less than two years after it first invested in the company. Cliffrose Investment Ltd, the Mauritius-registered affiliate of Warburg Pincus, is planning to sell only to a so-called third party, or one not associated with the promoters of DB Corp., before the company goes for a proposed sale of shares to the public. Cliffrose, which currently holds a 7.14% stake in DB Corp., has said this in a letter to the company. This information is present in the filing DB Corp. has made to India’s stock market regulator Securities and Exchange Board of India, or Sebi, in the run-up to an initial public offering (IPO) of shares. It’s not unusual for private equity firms to cash out of investments ahead of a share sale or even after it, either to make good on their gains, or hedge their bets should the market turn weak. “Such a move does raise the question of why an existing investor wants to sell out if the future of the company is bright. However, I don’t think it’ll have much of an impact. At the end of the day, it all boils down to the price band, or at what valuation the IPO is being offered. If the firm’s fundamentals are strong, just because a foreign investor sold a bit of their stake, the IPO is not going to be adversely impacted,” said Hitesh Agrawal, head of research, Angel Broking Ltd. […]

Should there be a policy on private equity investment?

Sometime last year, the monetary policy authority wrote to the Government and the capital markets regulator indicating its uneasiness with private equity flows. In the overall hierarchy of flows, the Central bank places private equity well below other forms of capital such as remittances and foreign direct investment. In fact, it has said that the classification of private equity flows would have to be looked at closely considering that in some cases, investors had exited quickly without staying on even for the medium term. These concerns and estimates of private equity investments topping $10 billion in 2007 had prompted the Government to write to SEBI. The finance ministry wanted the regulator to collect data relating to investments by private equity funds and based on that, to ascertain whether there were any regulatory concerns. The aim was to revisit the issue after an analysis. But private equity fund managers here who were fretting at the thought of being policed, need not worry at least in the near term. For, the capital markets regulator has made it clear that it is not equipped to collect the data on private equity. Rather, the Central bank, which monitors all inflows and outflows, is far better positioned to carry out this task, it has said. Since private equity could come in several forms, such as through foreign venture capital funds, it has been suggested that the RBI could be mandated to track these flows. […]

GLG takes 29% stake in Asian private equity firm

The US-listed hedge fund manager GLG Partners is set to join the gold rush for deals in China and India, after buying a 29 per cent stake in a local private equity group. The alternative asset manager yesterday announced it had paid £17.1m for the holding in Origo Sino-India, an investment and strategic consulting company focused on the private equity markets in the two emerging markets. It is GLG's first move to establish a presence in the region. The groups have signed a memorandum of understanding to target asset management and advisory opportunities in China, India and other emerging markets. One source close to the group said it was the sensible move for GLG, despite the relatively small size of Origo: “These guys have an impressive network in China and India – their contacts are top notch. It means GLG don't have to enter the markets and build a business from nothing.” […]

Nexus India invests in organic farming company

Nexus India Capital has invested in organic farming company Suminter India Organics Pvt. Ltd. It is the first investment in this sector for Nexus, which has so far invested in technology, mostly Internet and wireless, companies. “We had been looking to invest in clean technology and related sectors for some time, and we liked the entrepreneur,” said Sandeep Singhal, managing director, Nexus India Capital. He did not reveal the amount invested. The firm typically puts in $2-5 million (around Rs8-20 crore) in a company. Suminter is a contract farming company that focuses on organic produce for the textile and food industries. While organic farming does not constitute clean technology, a term more associated with energy, investors often include all environment-related businesses under clean technology. Such companies are on the radar of several venture capital firms, including Kleiner Perkins Caufield and Byers (KPCB), Draper Fisher Jurvetson, Lightspeed Venture Partners and Bluerun Ventures. However, there have been very few early-stage deals so far. The list includes Chennai-based Servals Automation Pvt. Ltd, funded by Aavishkar India Micro Venture Capital Fund; Bangalore-based electric car maker Reva Electric Car Co. Pvt. Ltd, funded by DFJ-ePlanet Ventures; and Indo-US cross-border start-up Deeya Energy Inc., funded by Bluerun Ventures, DFJ and DFJ Element (an affiliate fund). The last two have also received subsequent rounds of growth funding. […]

IFC to invest Rs 131 cr in Meghmani Organics

World Bank's private lending arm International Finance Corporation (IFC) will invest up to Rs 131 crore for a project of agrochemicals manufacturer Meghmani Organics. The strategic investment would be for the caustic chlorine complex in Dahej, Gujarat, being developed by Meghmani Finechem Ltd (MFL), a subsidiary of Meghmani Organics. The project is proposed to involve a total cost of Rs 554.5 crore. IFC would buy a 25 per cent stake in the project by investing up to Rs 46.1 crore, Meghamani said in a filing to the Bombay Stock Exchange. Besides, IFC would provide Rs 80 crore as a long-term loan and would also have the right to subscribe warrants up to Rs five crore. […]