April 2008
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Should India set up a Sovereign Wealth Fund?

Since the credit-crisis unfolded in late last year, sovereign funds – and others from Singapore, Korea, Abu Dhabi and elsewhere – have provided more than $50bn of fresh capital to US banks as well as to Barclays and UBS in Europe. So far, these have made terrible investments. The weighted average of the share prices of the big banks the SWFs invested in is down by some 30% since they bought in. Yet how these funds handle domestic criticism could provide clarity on the real nature of their mandates. Most sovereign wealth funds say they are passive investors. Their stated primary aim is to maximise returns on their governments' surplus capital – generated by the sale of oil or the export of manufactured goods. Sovereign-wealth funds may be blossoming elsewhere in Asia, but India's plans to create its own investment fund aren't likely to become a reality soon. Driven by a constant deluge of investment money, India's foreign-exchange reserves have swollen by more than $100 billion in the past year to a total of $294.61 billion as of Feb. 22. Meanwhile, the traditional avenue for these reserves — U.S. Treasury bonds — is becoming less lucrative by the day, as U.S. interest rates head downhill and the dollar weakens. [...]

RFCL acquired Bremer Pharma of Germany

RFCL Limited, an ICICI Venture company, announces its first global acquisition in the space of veterinary healthcare through a share purchase agreement with Marsing & Co Limited A/S for its Germany based subsidiary co. Bremer Pharma GmbH. Bremer Pharma has been into research, manufacturing and supplying veterinary medical preparations including powders, tablets, solutions, suspensions and injectables for over 26 years, through a worldwide distribution network. It has 803 global registrations across Europe, Middle East, Asia and Africa. The agreement is for transfer of all key people, assets, brands and the name “Bremer Pharma”, all contracts including exports. RFCL will gain a marketing foothold in the city of Bremerhaven, near Hamburg and a state-of-the-art manufacturing base in the rural heart of Germany, in Warburg-Scherfede with a processing capacity of nearly 663,000 litres of Liquids per annum per shift, nearly 1,032 tonnes of Solids per annum per shift and 1.5 million vials of Sterile solutions per annum per shift. [...]

Accentia Tech acquires 51% in Oak Technologies

Accentia Technologies has acquired 51 per cent stake in Oak Technologies, US for an all-cash deal. Oak Technologies is an integrated services provider in healthcare receivables management operating from US and several locations in India. Through this acquisition, Accentia got into its fold a global workforce numbering 700. Oak Technologies has 5 units operational in US and India. In India, it has presence in Hyderabad, Nagpur and Bhubaneshwar. [...]

Yatra buys 26.05 percent stake in Saket Engineers for 6.69 million euros

India-focused real estate investment company Yatra Capital Ltd. said it has invested 6.69 million euros for a 26.05 percent in Saket Engineers Pvt. Ltd, a Hyderabad-based residential real estate development company. Yatra Capital said with this, it now has invested in 12 deals and has used 153.03 million euros of the 220 million euros it has earmarked for investments in the Indian real estate market. (Hemscott) [...]

ICICI Bank may sell 12% in I-sec for Rs 3,600 crore

Global financial institutions such as Goldman Sachs, Morgan Stanley, JP Morgan, Credit Suisse and Nomura among others are in the race to acquire a minority stake in ICICI Securities (I-Sec) — the broking arm of ICICI Bank — in a pre-initial public offering placement of equity. source close to the development said they have shortlisted close to 12-15 expressions of interest from these institutions and the deal is likely to be sealed shortly. JP Morgan is the advisor for the pre-IPO placement. However, merchant bankers for the IPO are yet to be finalised. Sources added that 3-5 per cent will be placed with institutional investors ahead of the proposed IPO of ICICI Securities and the rest 5-7 per cent will be sold to the public through a share sale. ICICI Bank is looking at selling about 10-12 per cent of its equity in the broking firm. Sources said ICICI Securities has been valued at $7.5 billion (around 30,000 crore). [...]

Prozone sells 27% to realty fund

Real estate developer Prozone Enterprises has sold a 27% stake in its subsidiary to Triangle Real Estate India Fund for a total consideration of Rs 457 crore. The subsidiary holds stake in four projects that are being developed in Aurangabad, Indore, Nagpur and Jaipur covering approximately 16 million sq.ft. There have been concerns that the high real estate prices in the country is a bubble. However, this deal highlights that investments from foreign companies including real estate funds are continuing unabated. Triangle Real Estate India Fund is co-promoted by ICS group and Old Mutual Investment Group Property Investments, the property division of Old Mutual. In India, Old Mutual is well known as Kotak Mahindra's partner in the insurance business. [...]

SBI buys IFC stake in Global Trade Fin

State Bank of India has acquired a majority stake in Global Trade Finance Limited, which specialises in factoring services. The bank has taken over the stakes of IFC Washington, Exim Bank and Fim Bank Malta in the company, which is one of the largest players in the Indian market having around 40 per cent market share. The bank also has a majority stake in SBI Factors and Commercial Services Pvt Ltd, which has mainly been focusing on domestic factoring. This acquisition is expected to help SBI to consolidate its position in both SME business and export financing. (Statesman) [...]