July 2010
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Olympus PE to put Rs 2,800 cr more in infra, tech sectors

Three-year horizon; sequel to Rs 1,350-cr investment in Tata Power. Olympus Capital, the Asia-focused private equity (PE) fund, is exploring more strategic investment deals with Tata Power and infrastructure supply chain companies. This follows its Rs 1,350-crore deal a month ago in which it bought 15 per cent in two Tata Power-promoted companies which own coal mines in Indonesia. The Hong Kong-based firm, with $1.3 billion under management, will invest about $600 million (Rs 2,800 crore) in India in big and established companies in infrastructure supply chain management. In mind were boilers and turbine makers, balance of plant and engineering, procurement and construction companies, besides environmental-friendly technology, agriculture and food processing, information technology and business process outsourcing companies within the next two to three years, Daniel R Mintz, founding managing director of Olympus Capital, told Business Standard. […]

PE funds invested $300 mn in food processing, agri-based companies

Food processing and agri-based companies seem to have caught the attention of private equity (PE) investors, if the recent investment numbers released by accounting and consulting firm Grant Thorton are anything to go by. PE players have invested $300 million in these companies during January-June this year, according to Grant Thorton. In 2009 calendar year, PE investments in these sectors were about $398 million. The comparative figures in 2008 and 2007 were $187 million and $4.3 million, respectively. “The writing is on the wall. PE activity is growing in the space,” said C G Srividya, partner, specialist advisory services, Grant Thorton. According to Srividya, PE players are attracted by greater professionalism and accountability, openness to outside investment, and fairly attractive valuations of these companies. […]

Security services players to face 49% FDI ceiling

The government is set to limit foreign direct investment (FDI) in private security services at 49%, a decision likely to trigger consolidation and ownership change in the Rs 10,000-crore domestic security services industry. Several foreign security firms currently have presence in India. The development is expected to help home-grown security firms like SIS and Tops to consolidate their position in the fast-growing sector and force foreign players like Group4S to restructure their holdings and offload the surplus FDI in favour of domestic players. The domestic private security industry, growing at 25% annually, employs over 7 million. Thanks to the lack of specific rules, any foreign company can hold up to 100% stake in Indian security companies. The Union home ministry has now stepped in to limit their participation in Indian companies citing security reasons. […]

Rabo Equity to acquire 20% in Vacmet

Attracted by the rapidly-growing Indian demand for new kinds of packaging in food products, Rabo Equity Advisors, the private equity arm of Rabobank, has agreed to pick up 20% stake in Agra-based integrated packaging company Vacmet India. The PE firm, through its Indian Agri Business Fund and Real Trust, will invest Rs 50 crore. “We are excited about packaging because demand is growing in India for new and innovative technology to help companies extend the shelf life of their food products. The cost of packaging contributes more than 10% of a food product’s MRP. So this investment is in line with our overall focus on the food sector. We will assist Vacmet in sourcing latest technology in the world,” said Rajesh Srivastava, managing director, Rabo Equity Advisors. […]

Online ad space back on PE, VC cos' radar

Digital advertising and e-commerce firms in India are catching the fancy of private equity (PE) and venture capital (VC) firms. PE and VC investments in the online advertising and marketing space, which had gone down to $16 million in the first half of 2009, have shown a recovery and touched $28 million, or Rs 129 crore, in the first half of this year. Talking to ET, Mahendra Swarup, president, Indian Venture Capital Association, said: “Both PE and VC firms are active in the online advertising and marketing space. In fact, VC funds are more active in the sector as returns are higher. Typically, expectation of VC and PE firms is three-to-five times of their investments. But, in the case of digital advertising and marketing, which largely deal with mobile ad network, the expectation is 8-12 times of the investments.” The deal size in this sector varies between $5 million and $15 million. […]