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Hedge Funds Offering India Companies to Private Equity, 3i Says

Private-equity investors are being offered stakes in Indian companies as hedge funds and banks seek to offload assets, said an executive at 3i Group Plc. Hedge funds and banks that bought minority stakes in Indian firms in recent years are finding it hard to unwind their investments because the “listed market is dead,” said Anil Ahuja, who heads the Asian business of the London-based private- equity firm. 3i has poured more than $2 billion into Asia since 2006, and last month invested $161 million in Krishnapatnam Port Company Ltd., its third infrastructure investment in the nation. “There’s a whole new slew of transactions that are starting to be discussed where people who need the capital are offloading stakes which they hold in unlisted companies,” he said, declining to name the companies. [...]

Rabo Equity Advisors invests $9m in Indian agribusiness

Indian food and agribusiness-focused private equity firm Rabo Equity Advisors has invested INR450m ($8.7m) in Sri Biotech Laboratories India, via its India Agri Business Fund. The company manufactures and markets bio-organic agri inputs which are used for crop nutrition and crop protection. In addition Sri Biotech produces seeds, multi-micronutrients, biologically enriched organic manures and focuses on Integrated Crop Management and sustainable crop approaches. The investment will be used to strengthen in-house R&D focusing seed research, development of new molecules of crop protection and infrastructure. The commitment will represent a significant minority shareholding of the fund, at 28 per cent to 38 per cent over the next two years through a structured mechanism. The fund will also have a proactive association with the company including two seats on the board of directors. [...]

PE may relook India strategy amid Subhiksha, Satyam

Collapse of discount retailer Subhiksha coupled with economic downturn and fear-psychosis created by the Satyam scam is leading private equity investors to rethink their investment strategies in India, mainly in those firms with significant promoter control, experts say. “The Subhiksha incident will make PE firms more cautious on how much of a free hand they allow to a promoter. Some PE funds are concerned that promoters have a wide range of authority in their companies and could look to establish structures that would limit some of this authority,” KPMG Head of Private Equity Advisory Group Vikram Utamsingh told media. Meanwhile, SMC Capitals equity head Jagannadham Thunuguntla said success and failure are a part of the PE business. [...]