The recent amendments to qualified institutional placement (QIP) guidelines may boost private investments in public equity (PIPE) deals. After being in the downtrend in the first half of the year, deals in listed companies will revive, say experts, making it easier for the cash-starved firms to raise capital. The Securities and Exchange Board of India (Sebi), after receiving comments from various parties, said QIPs should be based on the average price of the shares two weeks prior to the issue. The earlier pricing formula had made matters worse for investors as it required to take an average price of six months or 15 days, whichever is higher. In a bear market, where stocks fall sharply, the QIP price always exceeds the current market price and investors are not willing to pay a premium for shares, which are available at rock-bottom prices.   more »

In India, where individual angel investors are few, firms such as Morpheus and Opdrage, offer start-ups mentorship and aim to create a pipeline of fundable start-ups for investors. With angel firms such as Accel India Venture Fund (formerly Erasmic Venture Fund) and Seedfund raising larger second funds, the firms expect the gap between starting out and getting funded will widen—increasing the demand for their services. “There is enough seed money available in India waiting for quality start-ups,” says Kris Nair, founder, Opdrage Ventures. “We want to be an entrepreneur cooperative.” Nair, a founding member of Satellier Inc., a Sequoia Capital-funded building information modelling start-up, set up Opdrage six months ago, mixing mentoring with investment banking deals. The firm is working with six ventures, including software application company APIster, furniture design store Cubicle One and a modelling start-up that is yet to be named.   more »

With more than one-third of market capitalization of India’s stocks eroding since January, the time would seem ideal for the private equity, or PE, business. Valuation expectations at both listed and private firms are more realistic today than ever, prompting large Indian business groups and professional PE managers to set up new funds. But a set of PE wannabes with backgrounds ranging from real estate to retail have put on hold their ambitions to enter the investment fund business. In the current market situation, raising money from investors either in India or overseas, who together contribute around two-thirds of the typical fund’s corpus, has turned difficult for these firms, experts say. The promoters of New-Delhi based Vishal Retail Ltd, which runs around 90 hypermarkets (large-size multi-product stores) and speciality stores across the country, have postponed their plans of floating a PE fund by at least a year.   more »