India's private carrier Jet Airways has bagged a loan of INR10 billion from the Mubadala Development Co, an Abu Dhabi-based investment company. The financial terms of the deal were not disclosed. Jet Airways has said that the loan will help fund the working capital needs and expansion plans of the company. The influx of funds is expected to aid the airline which is seeking additional funds to tide over the financial constraints caused by overdues to the state-owned oil marketers, airport authorities and operators.   more »

The Foreign Investment Promotion Board (FIPB) has ruled that foreign investment can flow into private equity funds registered as trusts. The move opens up another window of funds for private equity players and venture capital funds registered as trusts. The department of industrial policy & promotion (Dipp) was opposed to FDI in trusts, but FIPB has overruled the argument. This can lead to a new channel of investment for India Inc, especially start-ups. The FIPB’s view is that FDI can be permitted in trusts which intend to carry out PE investments, provided they register themselves as VC funds. Following the FIPB ruling, Dipp is now planning to introduce guidelines for allowing FDI in trusts that invest in companies, especially start-ups, with the aim of long term capital gains. Apart from mandatory registration with capital market regulator Sebi, the foreign investor will also have to comply with the know-your-customer (KYC) guidelines, a Dipp source said.   more »

A double whammy of adverse market conditions and a depreciating rupee is expected to hasten the consolidation process within the private equity (PE) and venture capital (VC) space, say industry watchers. Many foreign players are likely to exit their investments altogether in the country, they point out. Alok Aggarwal, chairman and founder of Evalueserve, a firm that tracks PE and VC firms, expects nearly 20% of foreign PE and VC firms to pull out. “Out of 370 PE and VC firms active in India, about 260 are foreign players. With the financial market meltdown and rupee depreciation having dealt major blows to the PE industry, we expect 60 to 70 of them to exit the country within next 12 months,” he told ET.   more »

Venture capital funds and private equity players continue to scout for investments in the Indian infrastructure sector but await Government initiatives to speed up investments, according to venture capital industry players. While there is continued interest from US and European investments funds in wide-ranging areas within infrastructure including airports, ports, roads and power projects, they want the Government, which is the main investor, to make first move. However, they warn that the overall investment during 2008 will come down compared to last year. While the exit options have come down due to market situation, the size of the deals and number of transactions will be lesser as investors are in a consolidation and wait and watch mode, according to Mr Sudhir Sethi, Founder and Chairman and Managing Director of IDG Ventures India.   more »