March 2008
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Blackstone, Primus eye Hinduja Foundries stake

Private equity firms Blackstone and Primus Capital Partners are in the race to pick up a minority stake in Hinduja Foundries, the Economic Times reported. Hinduja Foundries is the new name for the almost six decades-old Ennore Foundries Ltd, part of the diversified Hinduja Group. The Hinduja Group decided to sell close to 10 pct of its current 80 pct equity holding in the foundry unit to raise about 80-100 mln usd, the report added. The funds will be used to part-finance its proposed capacity expansion plan and for overseas acquisitions. […]

EDC to invest $50 m in infrastructure fund in India

Export Development Canada (EDC) is investing $50 million, its largest single equity investment to date, in a proposed $1 billion infrastructure fund in India to provide Canadian companies with new opportunities to participate in major projects i n the booming Asian market. EDC is Canada's export credit agency, which provides financing and risk management services to exporters and investors. The IDFC-sponsored India Infrastructure Fund will invest in infrastructure projects involving energy and utilities, transportation, t elecommunications and social infrastructure in India and will be managed by IDFC Project Equity Company Ltd. […]

Pvt equity deals on the rocks after market slump

Apparently hit by poor market sentiment, India has seen at least 14 major private equity deals fall through in the last three months with three big ones falling through in the last 30 days. The total number of private equity deals in February 2008 was 55 per cent lower than in January 2008. With the market in doldrums and valuation of companies looking stretched, financiers are walking away from deals struck in the better days of December. Hitesh Agrawal, who heads the equity research at Mumbai-based brokerage firm, Angel Broking said, “Globally, there is a liquidity crunch. In a post-sub-prime scenario, private equity players are more answerable to their investors, making it tough for a fund manager to select his investments and at the correct valuation.” […]

Sarovar Hotels plans to raise Rs 100 crore

Sarovar Hotels and Resorts, the multi-brand hotel management company, is in talks with strategic investors to raise about Rs 75-100 crore to fund its expansion plans. The company hopes to conclude a private placement of about 10 per cent of stake in three to six months. Sarovar Hotels is India’s largest chain of hotels operating in the mid-market segment. It operates 36 properties in India including, Hometel, and three, four and five-star hotels under the Sarovar brand, and is also the master franchiser for Carlson Hospitality Worldwide’s Park Plaza and Park Inn brands. It has around 33 properties under various stages of development, which will all come up in about three years. […]

PE deals hit pricing roadblocks

The sharp correction in prices of listed equities has already had its impact in the private equity space. A few large deals have fallen through since the market crash, with the most noteworthy being ICICI Ventures’ plan to invest $800 million (Rs3,240 crore) in Jaypee Infratech Ltd for a 10-15% stake. Earlier, Indivision India Partners, the private equity fund of the Future Group, called off a Rs250 crore deal with Zee group’s Dish TV. By and large, private equity deals have fallen through because investors toned down their valuation estimates in line with the drop in prices of listed peers, while promoters stuck to earlier estimates, based on the assumption that the fall in the stock markets is only a temporary phenomenon that will correct over time. […]

Promethean picks up minor stake in EIH

Promethean India, AIM-listed investment firm, is learnt to have picked a minority stake in the Oberoi Group’s listed hospitality arm EIH Ltd. According to sources, Promethean, which had picked less than 5% stake through the secondary market route, is looking to buy additional shares in the firm. EIH is the second most valued hospitality firm in India by market capitalisation after the Tatas’ Indian Hotels. EIH Ltd has a market capitalisation of Rs 6,000 crore. Promethean has invested in three other companies out of its $115-million fund raised last year. These include 8.5% stake in public-listed Nitco Tiles, which was again through open market purchases. While promoters did not dilute their stake, one of the co-founders of Promethean India Gaurav Burman was inducted in the board of the building material manufacturing company. According to sources in the merchant banking industry, Promethean had picked a small stake in EIH through the open market. This could be between 1% and 5% and the firm is now considering to hike it further. However, it is not known how much stake Promethean would finally hold in EIH. […]

BSE may have paid significant amount for 26% in NMCE

The news of Asia’s oldest stock exchange acquiring a substantial stake in the Ahmedabad-based National Multi Commodity Exchange (NMCE) may have come as a surprise to many. To those in the know, it was a pure financial move by the Bombay Stock Exchange (BSE) in that it may prove to be a multi-bagger going forward when some financial bigwigs enter the commodity arena. Recently, the BSE bought a 26% stake in NMCE for an undisclosed amount of money. People familiar with the deal say that the stock exchange had to shell out around Rs 40 crore for the stake, valuing the comex at around Rs 150 crore. “BSE is of the firm belief that going ahead, others would be interested in acquiring a stake in NMCE. At that time, it would have an option of diluting a part of its stake and that too at a premium,” says a source. It is clear that the stock exchange would not be involved in the daily working of the comex. BSE members would also not be automatically eligible for NMCE memberships. They would have to submit a request to the Forward Markets Commission (FMC). […]