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A clutch of leading private equity giants such as Blackstone are in the race to acquire a minority stake in Nusli Wadia’s Bombay Dyeing. There is growing buzz in the market that the Wadias are looking at shedding less than a 15% stake to private equity funds. People close to the situation said that Bombay Dyeing, which needs money to expand its real estate and airlines business, along with its planned forays into retail, may consider the private equity route as one option for raising money. A Bombay Dyeing spokesperson categorically denied any plans to rope private equity investors into the company. When quizzed if private equity giant Blackstone is the frontrunner, a senior executive of the company said: “We have not even had a cup of coffee with anyone in Blackstone at any level.” Akhil Gupta, chairman and managing director of Blackstone India, said: “We have signed confidentiality agreements with several people. I cannot comment on the individual specifics of the deal.” People close to Bombay Dyeing say that the Wadia family, which has never shared equity with outside investors in any of its old core companies, will have the final say in determining the transaction’s success. The deal may not happen if the terms are too onerous or if the Wadia family feels that money can be easily obtained through other means such as a rights issue. […]
Private equity firms are making a killing in India. Most of their investments in listed companies over the past two years have turned out to be money spinners. Some of the PE favourites like NIIT, Lakshmi Overseas, Centurion Bank of Punjab, Diamond Cables, KS Oils, Sical Logistics and Himadri Chemicals & Industries have outpaced the Sensex in returns to investors during the period, although a few like GMR Industries, Spentex Industries and SpiceJet are yet to see positive returns on investments. According to data compiled by research outfit Thomson Financial, the highest rise in share prices following the announcement of PE funding has been for Delhi-based infotech training firm NIIT, mustard oil manufacturer KS Oils and cables & conductors maker Diamond Cables. The share price of NIIT has shot up 518% since May 12, 2005, the day it was announced that Intel Capital would invest $10 million in the firm. In comparison, the Sensex during the same period has risen by 140%. Baroda-based Diamond Cables’ scrip has gone up 396% from June, 2006, when PE funding in the company was announced. Sensex in the same period went up by 56%. KS Oils has seen a 230% increase in the scrip price, against a mere 15% jump for the Sensex from November 15, 2006, the day Citigroup Venture Capital’s investment in the firm was announced. Auto component maker Amtek Auto, pharma company Jubilant Organosys, Patel Engineering and JBF Industries are the four companies where returns on the investments made by PE funds are positive, though a little less than the gains made by the Sensex during the same period. […]
ABG Shipyard is likely to pick up a 40 per cent stake in Western India Shipyard for Rs 225 crore. According to sources, the board of directors of ABG Shipyard in its Wednesday's meeting approved the merger proposal. ABG bought the shares held by institutional investors ICICI, IDBI, Bank of India, State Bank of India and UTI. The original promoters of Western India Shipyard, Western Paques India, Western India Industries and Gadgil Western Corp now hold over 8 per cent stake in the company while retail investors hold the remaining. The institutional investor's holding of over 15 per cent in the company was subsequently increased to 40 per cent after a capital restructuring procedure. “The acquisition is more or less a distress asset sale. The consortium of banks, which are hold majority stakes in the company wanted to exit, as the company was continuously making losses,” a Mumbai-based analyst, who did not wish to be identified, said. […]
Sun Pharmaceutical Industries, which has been struggling over the last few months to gain control over Israel’s Taro Pharmaceutical Industries, may need to pay a higher price than expected to woo the Israeli drug maker’s shareholders, analysts said. Sun had agreed last May to buy Taro Pharma for about $454 million, or $7.75 per ordinary share. However, the deal had hit a roadblock as a section of Taro’s shareholders insisted that the price offered by Sun was too low. In July, Sun released Taro from its non-solicitation agreement, allowing the Israeli company and its investors to weigh other offers. “While it is unlikely that Sun will lose Taro to another buyer, it could end up paying more than it had initially planned,” said a senior industry analyst. Sun bought 18% in Taro in May and has increased its stake to 25% through conversion of warrants. Out of the 6.8 million warrants it had, the Indian company has converted three million, at a price of $6 per share. It also has the option to infuse capital into Taro by converting the remaining warrants. If the merger agreement is defeated at Taro’s general annual meeting, Sun Pharma may need to launch a new tender offer to the shareholders of the Israeli drug maker. While Taro’s promoters have a contractual obligation to sell their stake to Sun, it remains to be seen whether such an offer would be attractive to shareholders at a price of $7.75 per ordinary share. Taro Pharma shares, traded in the Pink Sheets electronic quotation system, were hovering about $7.80 on Wednesday. […]
Info Drive Software Ltd has announced that the Company has signed an indicative Term Sheet along with a Non Disclosure Agreement for acquiring majority stake of 51% with a leading provider of Enterprise Technology Solutions. The Company is driven by offerings around Systems Integration, Infrastructure Management, Software Services and Biometric Solutions. The Company, with over 900 employees, has built a formidable track-record of customer satisfaction, & loyalty backed by highly matured and successful partnerships with Global IT Providers. The Company addresses the Information Technology requirements of Corporate, Small and Medium enterprises and has a blue chip client portfolio spanning across Corporate India, Global IT/BPO Companies, MNC's and Educational Institutions. The Company, is in the process of finalizing the Definitive Agreement and would be convening a Board meeting to take on record the final agreement once it is signed.(Equity Bulls) […]
India-focused private equity Peepul Capital LLC said on Wednesday it had raised $214 million for a second fund and was looking at sectors such as manufacturing and logistics. Peepul, formerly iLabs Management, has been investing in Indian companies since 2000. It has a total corpus of $325 million, with investments in technology, media and consumer product firms. “Our aim is to build on existing capabilities as well as continue to explore new domains,” Managing Director Sandeep Reddy told reporters at a news conference. The fund, which has sold investments in Internet firm Sify Ltd. and news agency Indo-Asian News Service, usually looks for deals of $5 million to $30 million but is open to larger holdings, he said. It currently has investments in more than a dozen Indian companies, Reddy said, but did not give details. Industry tracker Chennai-based Venture Intelligence estimates private equity investments in India will rise by a third to about $10 billion in 2007. There were 47 private equity deals in July and August totalling $2.36 billion, compared with 60 deals worth $1.08 billion in the same period last year. (ET) […]
Beacon India Private Equity Fund, belonging to Baer Capital Partners, has invested Rs 75 crore in A2Z Maintenance & Engineering Services, a fast-growing engineering, procurement and construction (EPC) company. A2Z has registered massive growth over the last three years riding on the back of reforms in power sector and the unbundling of state-owned electricity boards. The company recorded a turnover of Rs 182 crore last year and registered a compounded growth of 446 per cent, a press release said here on Tuesday. Beacon India Private Equity invests in small and medium-sized companies across different sectors with investment size being in the region of $5 million to 25 million. (ET) […]
The promoters of Indian companies are hiking their stake through the issue of warrants and preference shares. A host of small and mid-cap companies such as Webel SL Energy, Madhucon Projects, Alphageo India and Almondz Global (formerly Allianz Securities) have issued warrants or preferential shares to their promoters in recent months. Companies generally opt for warrants as they are not required to pay money upfront and can redeem them within 18 months, according to experts. With the threat of takeovers looming large, promoters are using the preference and warrant route to increase their stake. A preferential issue is an issuance of equity shares to the promoter group or selected investors. It covers fully convertible debentures, partly convertible debentures or any other financial instruments that could be converted into equity shares at a later date. One of the main reasons why companies go for preferential issues is that they can raise money quickly and cheaply compared with other means such as IPOs or rights issues. However, since preferential issues are meant for a certain class of investors, the retail investors are deprived of investment opportunity. […]
Norwest Venture Partners (NVP), a leading Silicon Valley venture capital firm, has opened office in India. The firm, led by Promod Haque, is best known for its technology investments. Its portfolio has 60 companies including 20 that are based in the US but have an Indian presence. Five of its investee companies are based in India. Norwest’s India operations will be based in Mumbai and headed by Niren Shah as managing director. Shah was earlier with eBay in the US as senior director of strategy and ventures and before that with KPMG’s corporate finance team in India. Two more executives are likely to join the team in Mumbai as the fund expects to finalise more India investments. Unlike a few VC firms that have floated India specific funds, NVP makes all its investments from a global fund. The investments are across the US, India and Israel. The firm has around $2.5 billion under its management with the current fund at $650 million. Mr Haque said the number of India investments may to go up from 10% to 15% of the total fund size.(ET) […]
Institutions, who were unwilling to touch IFCI with a barge poll even a few years ago, now want to buy a stake in the company. Soon it will be clear whether such interests are genuine, or the hype around the scrip is only to help some operators who have built up positions to make a killing. The latest buzz is that the US-based hedge fund DE Shaw has joined the race for acquiring a strategic stake in IFCI, India’s oldest state-owned financial institution. DE Shaw, with assets worth over $30 billion, is believed to have put in bids in response to IFCI’s decision to sell a 26% stake in favour of strategic investors, said sources. When contacted by ET, DE Shaw country head Anil Chawla said: “I do not comment on my investments.” Apart from DE Shaw, a host of other leading investors are also reportedly contending for the IFCI pie. Blackstone, Citigroup, Barclays and Standard Chartered Bank figure prominently among the possible foreign suitors. Besides some of IFCI’s investments which have grown in value, the stock is thriving on the story that there is a real estate play underlying several dud loans of IFCI. […]
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