August 2008
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Indiabulls set to sell 35% stake in comex

Indiabulls Financial Services is set to close a deal with HDFC Bank, Yes Bank and Delhi-based India Potash to offload around 35 per cent stake in the commodity exchange it is setting up with public sector company MMTC. While the details of the new shareholding are unavailable, Yes Bank Managing Director and CEO Rana Kapoor told Business Standard that the private player is in talks to acquire 5-10 per cent stake in the exchange. A source close the development said the three players are expected to pick up around 10 per cent each in the venture, with MMTC holding 26 per cent and Indiabulls the remaining 40 per cent stake. Indiabulls has been asked by the regulator, Forward Markets Commission (FMC), to pare its stake from 74 per cent at present. […]

Venture firm Nexus closes its second fund at $220 million

Mumbai-based venture firm Nexus India Capital closed its second fund at $220 million (about Rs958.8 crore), more than double its first fund of $100 million, becoming the second Indian fund to raise money after the global market meltdown and in the shadow of growing uncertainty over the ability of the Indian economy to continue to expand by at least 8%. In both cases, the money came from limited partners, or institutions that back equity funds, in the US. In February, Helion Venture Partners had raised $210 million for its second fund, mostly from the US backers. “It is a very difficult time to raise money, but there is still a lot of interest in the Indian market, and LPs (limited partners) are looking for strong Indian teams,” said Naren Gupta, managing director, Nexus India Capital. In the months following the meltdown, VC firms had predicted that it would be easier for established global funds to raise capital, than for first-time domestic ones. […]

Lalbhai taps PE to propel Mega Mart

Textile baron Sanjay Lalbhai has opened discussions with a clutch of private equity players to fuel the expansion of Arvind's discount fashion chain Mega Mart. It is believed that Arvind has mandated Enam to raise around Rs 100 crore in Mega Mart, which is spun off as separate company within the Arvind fold, sources said. Sources said Mega Mart would have received interests from Indian private equity players, such a ICICI Ventures and IL&FS, for a possible private placement. The restrictions on FDI in multi-band retail will limit Mega Mart's suitors to pure-play India funds. Mega Mart could be seeking a valuation of around Rs 700-800 crore. Mega Mart closed with approximately Rs 140 crore tunover in FY08. […]

PEs stock up during crash, reduce cost of acquisitions

The recent slide in stock prices has come as a boon for private equity investors, many of who had bought stakes in listed companies via private placements at frothy valuations. Some of these entities are now buying the shares of these companies through the secondary market at lower prices, thus lowering their original cost of acquisition. “When private equity firms see long-term potential in the companies they have invested in, they resort to dollar-cost-averaging when the market corrects. This is what has happened of late,” said Nexus India Capital CEO Sandeep Singhal. Among notable instances of such secondary market purchases, Apax Partners hiked its stake in Apollo Hospitals to 14.52% as on June 2008, from 12.01% in December 2007. In another case, Standard Chartered Private Equity, which had 5.47% stake in M&M Financial in March 2008, raised its holding in the company to 7.93% by June 2008. […]

Opto Circuits buys Criticare of US for $70 mn

Medical Devices major Opto Circuits has shelled out $70 million to acquire US-based Criticare Systems, a non-invasive medical devices manufacturer in April 2008. It borrowed $52 million to finance the overseas purchase. On Tuesday, Opto chairman & MD Vinod Ramnani said: “The founders of the foreign company sold their stake early on and it was being run by a group of people who had no stake in the company. We saw the synergy and knew that we could integrate the company and take it forward.” Criticare currently outsources the production of its products to Taiwan. Opto, however, plans to transfer production to its Bangalore facilities by June 2009. The company projects that this will add an additional 20% to the bottomline. […]

General Atlantic to buy 20% in Wockhardt Hospitals

US-based private equity (PE) major General Atlantic is learnt to be final stages of talks with Wockhardt Hospitals to invest around $140-150 million. Although there are some differences over the valuation and structure of the investment, the PE may pick up around 20% stake in the Indian company, sources said. The hospital chain has been in talks with several PE funds after its initial public offer (IPO) got derailed earlier this year. Talks with most PE funds had also fallen through over differences about the company's valuation, PE sources said. When contacted, a Wockhardt Hospitals spokesperson said: “We don't comment on market speculations.” […]