March 2008
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Kotak pvt equity fund raises $440 mln

Kotak Investment Advisors Ltd, an unit of Kotak Mahindra Bank , has raised $440 million through its third private equity fund, it said on Monday. The Kotak India Growth Fund II raised the money within three months mainly from the client base of the group, it said in a statement. The private equity unit of the group manages three funds – India Growth Fund – I, India Growth Fund II and Kotak India Venture Fund I – and typically invests $15-40 million in each firm, the statement said.(Reuters) [...]

Hinduja in talks to buy stake in France's Valeo

Hinduja Group is planning to buy a controlling stake in French auto component manufacturer Valeo in a deal expected to to be valued around 1.5 billion dollars, a newspaper report said Monday. The Indian business conglomerate met top executives of Valeo in Paris recently and talks were on, the Business Standard newspaper reported citing unnamed sources. A Hinduja Group spokesman based in Mumbai said the report was speculative and refused to comment. [...]

Henderson invests $21.5 mln in India agrochem firm

Private equity firm Henderson Equity Partners said on Monday it has completed a $21.5 million investment in Sharda Worldwide Exports Pvt Ltd, an Indian agrochemical company based in Mumbai. Founded in 1987, Sharda registers and markets off-patent agrochemicals in 50 countries and across the herbicide, fungicide and insecticide sectors. “The Henderson team has spent a lot of time reviewing the agrochemical sector and we believe that the sector and Sharda will be strong beneficiaries of increasing regulation of agrochemicals and increasing crop acreage,” said Vishal Marwaha, a partner of Henderson Equity Partners. [...]

Kotak to raise $1 bn core sector fund

Kotak Investment Advisors, the alternate investment arm of the Kotak Mahindra group, is set to launch a $1 billion (Rs 4,000 crore) infrastructure fund. The group, which consolidated its alternate investment business, currently manages two private equity funds and three real estate funds. The infrastructure fund will invest in core assets like power and transportation, which includes roads, ports and airports. The funds will be raised in the first quarter of 2008-09. [...]

Lack of skilled manpower threat to PE companies

Though the roots of private equity (PE) lie in post-World War II America, the industry has come into its own in India only in the last few years. The PE industry here is growing steadily and global PE players such as Blackstone, Warburg Pincus, Temasek, and Sequoia are sharing space with Indian firms like ICICI Venture, Matrix Partners, Kotak, GW Capital and others. Most of these are lean companies. For example, ICICI Venture, which is one of the largest private equity firms in India, with funds under management in excess of $2 billion, has between 80 and 90 people on its staff. Others are much smaller, with core teams consisting of as few as 3-4 employees. And while the sector is bullish on growth and hiring prospects, there is one hitch that threatens to spoil the PE party. Private equity players in the country are concerned about the supply of trained manpower at operational (senior) levels. [...]

MBD in talks with PE funds, may sell up to 49% equity

Delhi-based publishing house MBD Group is in talks with international private equity firms to offload equity in its mixed-use development MBD Zephyr in Bangalore, as it tries to raise funds in a nervous and choppy market. The mixed-use development, which is expected to be completed by 2011 will have a luxury hotel, space for luxury and premium retail, and entertainment spaces. The company is looking at offloading between 26% and 49% equity in the retail portion of Zephyr, which is spread over more than 80,000 sq. ft. “We have started sensing the market. We have been approached by some private equity funds,” said Sonica Malhotra, executive director, MBD. She did not say how much the company expected to raise from this divestment. The eight-acre MBD Zephyr project at Whitefield near Bangalore is targeting luxury brands such as Gucci, Versace, Louis Vuitton and premium ones such as Debenhams, Zara, Mango and Body Shop. Zephyr will also have a 450-room luxury hotel owned and managed by the MBD Group. [...]

Yatra in talks to buy stake in Parsvnath bus terminal project

Yatra Capital, the Euronext-quoted India-focused real estate fund, is in final round discussion with Parsvnath Developers (PDL) to pick up 30% stake in latter’s bus-terminal-cum -commercial complex project in Mumbai for around 220 crore. Sources said the fund has valued the Mumbai project at over Rs 700 crore. In 2006, PDL bagged the real estate project from BEST, the state government-owned transport and electric supply utility, to develop its surplus land in Kurla as a bus terminal-cum-commercial complex. The project has over of 40,000 sq ft developable area. [...]

PE deals in textiles

Sequoia will invest up to Rs 120 crore in the rapidly growing garment retail business Nahar Retail. Better known by its brand name ‘Cotton County’, Nahar Retail attempts to do what very few have managed in India, build a profitable garment brand with an associated retail presence. To be fair to Nahar Retail, it has covered a lot of ground since its launch. Some reports suggest that it has 400-plus outlets in 300 cities. This is a massive reach. However, in retail, it is one thing to quickly expand reach. It is quite another to build a profitable business. The retailer has to ensure that a majority of the stores break even and become decently profitable. This requires ensuring foot falls, then conversion of those foot falls into sales. Not every attempt succeeds in this. Arvind Brands tried to build an aggressive retail presence about 6-8 years ago. It succeeded for a while, at least in establishing a large network. But then it rolled back most of that strategy within 2-3 years, which seems to suggest that most of the stores never reached breakeven. [...]

Triangle India Real Estate Fund secures $400 million pipeline

The Triangle Real Estate India Fund, established by Old Mutual Investment Group Property Investments (OMIGPI) and ICS Realty of India with the aim of achieving superior returns in the world’s fastest growing economy after China, has secured an investment pipeline of projects worth more than $400 million. The $500 million fund, which is due to open on March 31, is initially aiming to capitalise on the rapidly expanding organised retail market in India, says Colin Young (Pictured right), head of institutional property investments at OMIGPI. “Organised retail is wholly under-represented in India,” he says. “Retail is dominated by small operators, mainly owner-operated kiosks. Currently organised retail accounts for less than 4% of the $400 billion market. “The organised sector is expected to grow to 12% by 2010 as consumer preferences in a growing, urbanising population, half of which is under 25, increasingly shift to modern retail formats. [...]