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After infrastructure and real estate, private equity (PE) funds are stepping up investments in the booming hospitality sector. Biggies such as Lehman Brothers and Kotak Mahindra Realty Fund have kicked off negotiations with several players in the hospitality industry. Besides the metros, investments could pour into tier II cities — Hyderabad, Ahmedabad and Pune — as well. US-based Sun Apollo Ventures LLC is set to follow suit while Blackstone is open to funding this segment in due course. Kotak Mahindra Realty Fund has already made a couple of investments in hospitality projects. “We are bullish on the business and budget hotel segment in India. Our company has invested in two projects and are considering many more in the sector”, said Kotak Realty Fund CEO Mr Sriniwasan. Kotak Mahindra Realty Fund invested Rs 32 crore in Lemon Tree, a budget hotel chain. This was followed by a Rs 45 crore investment in the Pride groups, adds Sriniwasan. The company is also keen on investing in tier II cities. “The return on investment could be quite high in these cities, thanks to the large professional and student population”, he said. NYSE-listed Lehman Brothers had invested around $ 100 million in the Kishore Biyani-promoted Future Capital Holdings to fund hotel projects in India. […]
Sovereign government funds of Singapore, Dubai and Abu Dhabi are in race to buy 5% stake in Reliance Power in a private placement ahead of its proposed IPO. The US private equity firm Blackstone is also in talks with the company and the stake is being valued at around $1 billion. The Anil Ambani-promoted company is planning to raise up to $2.8 billion by tapping the capital markets by the year-end, making it the biggest IPO in Indian history. The company will dilute a little over 10% stake to the public and this pre-placement exercise is being done to put a valuation benchmark for the IPO, which is awaiting Sebi’s clearance. According to i-banking sources, the expression of interest from various players gives Reliance Power a valuation of over $20 billion. The company may dilute any thing between 2.5% and 5% stake to raise around $500 million to $1 billion. The stakes will be diluted to three categories of investors — the sovereign, PE and financial institutions. […]
Asian Private equity player SAIF Partners is looking to invest Rs 75-100 crore in Gujarat-based crane manufacturer Anupam Group of Industries. This will be the first round of private funding for the company. E-mails sent to both Anupam Industries and SAIF Partners did not elicit a response. However, sources close to the development say the deal is almost signed. The amount of stake that Anupam Industries will dilute is not yet known. Anupam Industries is one of the largest manufacturers of cranes including power cranes, grabbing cranes, steel plant cranes, construction industry cranes, refinery cranes and nuclear industry cranes in India. The company caters to several companies including Tata Steel, Essar, Jindal, NTPC, Bhel and the Aditya Birla Group. The private placement is expected to fund the company’s expansion plans. SAIF Partners, which manages two funds with a combined corpus of $1 billion, has bought a 5% stake in NSE for over Rs 500 crore. The New York Stock Exchange, Goldman Sachs and General Atlantic have also bought stake in the exchange along with SAIF Partners. The fund has also bought stake in Chennai-based pulse processing company Asian Dhall Industries. […]
Baer Capital Partners, a Dubai-based funds management company, plans to raise $500 million to invest in real estate and infrastructure in India, the world's fastest growing major economy after China. The firm will begin investing in India in the second quarter of next year after tapping investors outside India in early 2008, Alok Sama, president of Baer Capital, said in an interview in Mumbai. “It's critical for India's economic development that infrastructure is increased sharply,'' said Pauli Laursen, who manages $800 million at Sydinvest Asset Management at Aabenraa in Denmark and holds shares of Indian companies including Larsen & Toubro Ltd. and Bharat Heavy Electricals Ltd. “India needs money from all over for its infrastructure.'' India requires half a trillion dollars of investment in infrastructure including roads and power plants during the next five years as it aims to lift growth in its $906 billion economy to 10 percent by 2012. Baer Capital joins JPMorgan Chase & Co., 3i Group, Blackstone Group and Citigroup Inc. in planning to invest funds from overseas in Indian companies building roads, ports and electricity plants. […]
In the first of its kind among property consultants, the UK-headquartered Knight Frank Group will launch a $250 million India-focused real estate fund. According to sources in the know, the offshore fund will raise investments from high net worth individuals and other investors from the UK and will have an investment threshold of $0.5 million and above. However, employees of the consultancy can invest smaller limits and the fund will invest in FDI-complaint projects in the country, according to sources. The fund-raising is expected to begin by January 2008 and will close in a couple of months. Rutley Capital Partners (RCP), Knight Frank's real estate private equity and investment management arm, is expected to spearhead the launch of the India fund. However, an e-mailed questionnaire to Robert Hannington, managing partner, RCP, did not elicit any response. […]
Denmark-based beer manufacturer Carlsberg has acquired a 60 per cent stake in Parag Breweries. This is expected to increase Carlsberg’s capacity by 1.6 lakh hecta litres (hl). Joakim Sande, marketing director of South Asia Breweries, through which Carlsberg operates in India, said, “We are looking for a stronghold in the eastern market. Parag Breweries in Bengal proved to be a great opportunity. We will start production there in the first quarter of 2008.” South Asia Breweries is a joint venture between Carlsberg, Denmark’s Industrialisation Fund for Developing Countries (IFU) and a group of investors. Carlsberg has a 45 per cent stake in South Asia Breweries, the IFU holds 10 per cent, while a group of investors, led by Carlsberg’s Sri Lankan partner Lion Brewery Ceylon Ltd, hold the rest. […]
India’s private equity story is getting bigger even as the global credit crunch is squeezing the funds mopup globally. It is believed that private equity funds are in the midst of raising a jaw-dropping $48 billion for the Indian market by 2010. And the way the Indian economy is growing, experts opine the figure could be bigger. “Since 2003, the Indian economy is growing at 8–9% annually in real terms and at 13–15% in nominal terms (including inflation). Some sectors (services and high-end manufacturing) are growing at 10–14% in real terms and 15–20% in nominal terms, thereby attracting VC-PE investment. If this kind of growth continues, the economy can easily absorb $60 billion during 2007–10 and as much as $500 billion during 2007–20,”’ according to Evalueserve chairman Alok Aggarwal. Several PE firms would be willing to invest even more if they saw good investment opportunities, he added. […]
Network services major GTL has acquired a Malaysia-based network planning and optimisation company, ADA Cellworks, in an all-cash deal of $25 million (around Rs 100 crore). The acquisition will conclude in the next few weeks. “With this, we have progressed on our inorganic growth strategy and strengthened our presence in the high value segments of network planning and optimisation,” GTL Chairman and Managing Director Manoj Tirodkar said. The acquisition will also result in access to markets in China, Indonesia and South-East Asia. This will also strengthen relationships with leading telecom technology providers such as Nokia Siemens Networks, Alcatel Lucent, Motorola, Ericsson and Huawei, he added. […]
To measure media growth, advertising spends as a ratio of private consumption rather than GDP (gross domestic product) is a much better indicator. In the next five years, India’s ad expenditure as a ratio of private consumption will be 1.2 per cent,” according to Akhil Gupta, chairman and managing director of Blackstone Advisors India Private Limited. Gupta was speaking at a conference organised by the International Newspaper Marketing Association in New Delhi. Traditionally, all markets measure advertising expenditure as a ratio of GDP and India’s current ad spends, at .34 per cent of GDP, are much below the one per cent average clocked by developed countries. According to Gupta, India’s media industry is at an inflexion point and is expected to see an explosion in advertising. “For private equity investors, the media is right at the top and a favoured investment opportunity only after infrastructure,” he said, adding that the challenge will be to grow print media’s share from the current 45 per cent of total advertising. […]
Power trading firm PTC India’s proposal to rope in foreign investors for its financial services arm is expected to come up for Foreign Investment Promotion Board (FIPB) approval during the board’s next meeting on November 16. It’s understood that the PTC proposal includes allowing two private equity (PE) majors — Goldman Sachs and Macquarie — to acquire 40% equity in PTC Financial Services (PFS). PTC would retain the remaining 60% in PFS. Though the names of the two players have been kept under wraps by PTC, pending FIPB clearance, sources said both the PE players would pick up 20% stake each in the company. The deal is expected to be in the region of Rs 120 crore. An agreement on the terms and conditions of the deal has already been reached, but a formal announcement is expected only by the month-end. ET first reported about the deal with private equity players last month. […]
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