February 2008
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For pvt equity, HR consulting’s the next stop

Gaurav Mathur's India Equity Partners, $350 million fund invested $8 million in Bangalore-based Ikya Human Capital Solutions earlier this month. Ikya operates in the human resources (HR) services business and offers executive search, contingency recruitment, staffing and training solutions. Such companies, many agree, could be the next genie from the bottle that private equity would latch on to. “The deal (Ikya) could very well be the beginning of a trend, what with one of the main bottlenecks for growth across various sectors being the difficulty in finding the right people,” says Arun Natarajan, founder and chief executive officer of Venture Intelligence, a provider of information and networking services to the private equity ecosystem in India. […]

Indiabulls to buy Dev Property for Rs 1,092 cr

Indiabulls Real Estate (IBREL), India’s fourth biggest developer by market value, will acquire its partner Dev Property Development (DPD) in an all-stock deal. Indiabulls has valued Dev Property at £138 million (about Rs 1,091.85 crore) and the share at 100 pence, based on the closing price of IBREL at Rs 654.40 on Wednesday (at an exchange rate of Rs 79.12 for every Pound Sterling). IBREL will issue new shares in the form of global depository receipts (to be listed on the Luxembourg Stock Exchange’s Euro MTF) equivalent to the valuation of DPD. Indiabulls is offering 0.12091 of a global depository receipt for each share of London-listed Dev Property, the Mumbai-based real estate company said. The offer matches the £138 million Dev Property raised when it sold shares in January 2007 in the Alternate Investment Market of the London Stock Exchange. The stock has since fallen 24.5 per cent. The proposal to buy DPD was approved by the IBREL board at a meeting today. The deal is subject to The approval of shareholders and certain regulatory approvals. […]

ICICI Venture buys 15% in Arrow Webtex

Private equity firm ICICI Venture has picked up a 14.9% stake in Mumbai-based textile and real estate development firm Arrow Webtex through a preferential allotment. The deal is estimated to be in the region of around Rs 130-140 crore. The transaction gives the private equity fund a stake marginally below the level which mandates an open offer for public listed firms in India. Arrow Webtex is engaged in the business of woven and printed labels, elastic tapes, apart from various activities related to real estate, hospitality and gaming business through its subsidiaries. For the quarter ending December 2007, it had consolidated net sales of Rs 46.03 crore with consolidated net profit of Rs 2.76 crore. The company has a market capitalisation of around Rs 645 crore. As per the disclosures made to the stock exchanges, ICICI Venture, which manages various private equity, real estate and mezzanine funds, has picked up around 2.03 crore shares through the allotment last week. If the deal was struck at the market price on the day, it would be valued at about Rs 132 crore. However, preferential allotments are usually done at a small premium. […]

BTS to invest $4 million in QAI India

BTS Investment Advisors, a Switzerland-based private equity fund, is all set to invest around $4 million in QAI India Limited (QAI India), one of the leading global consulting organisations addressing ‘Operational Excellence’ in IT, BPO and knowledge-intensive organisations for a significant minority position. BTS India Fund has a corpus of $80 million, with prominent institutions as anchor investors including the Swiss government, ADB, The Belgian Investment Company for Developing Countries (BIO) and the International Cooperation and Development Fund, Taiwan. The fund targets medium-size companies of growth sectors which are either export driven or address the booming domestic markets, and seeks significant minority stakes in these companies. According to sources close to the deal, the transaction is likely to be inked in the next few days. However when contacted, K Srinivas, Managing Partner declined to comment. […]

PEs go `clubbing`

After the Bharti Infratel deal, India could see more group approach in PE investing. Private equity firms in India are going `clubbing’. Earlier this month, eight private equities, led by Temasek Holdings, an investment arm of the Singapore government, decided to band together to invest around Rs 4,800 crore in Bharti Infratel, the tower arm of the Bharti Group. While a group approach in investment is not unusual in the private equity space (Temasek itself had invested in Matrix with Newbridge), the latest deal, which valued Bharti Infratel at Rs 40,000-50,000 crore, stands out for two reasons: first, an eight-way deal is a rarity all over the world; and second, it was the largest `club deal’ by private equities in India. While Temasek put in Rs 2,000 crore, US private equity firm Kohlberg Kravis Roberts & Co put in Rs 1,000 crore and the other six put together committed the balance Rs 1,600 crore. The six firms are the Investment Corporation of Dubai (ICD), Goldman Sachs, Macquarie, AIF Capital, Citigroup and India Equity Partners (IEP). […]

Opto to buy US co in $70 million deal

Bangalore-based healthcare equipment manufacturer Opto Circuits India has announced that it will acquire US-based Criticare Systems in a deal valued at $70 million. Opto has signed a definitive agreement with the US company on the same, the company told the Bombay Stock Exchange. US-based Criticare Systems, which posted sales of $31 million for the year ended June 2007, is in the business of manufacturing vital sign monitors, anaesthesia monitors and pulse oximeters. For the quarter ended December 2007, Opto Circuits posted turnover of Rs 127 crore. Opto Circuits’ product range includes pulse oximeters, pulse oximeter sensors, fluid warmers, cholesterol monitors and stents. It has a manufacturing and R&D facility in Bangalore. […]

VC funds jittery on Budget-eve

The venture capital sector is jittery as Budget 2008 draws near. VCs, especially the domestic ones, were in a state of lethargy since Budget 2007, when ‘pass through’ status was granted only to investments in specific IT and biotech areas. And the plan to bring overseas M&As involving Indian companies under the tax net, that too with retrospective effect from June 1976, is making them even more worried. “Taxing M&As will be a very retrograde step. The world now sees us as a developed economy and we should behave in that manner. It will be totally unfair to tax M&As, that too in retrospect,” says president of TiE Delhi Saurabh Srivsatava. “The government should also restore the pass through status as it was earlier, as it does not make any material difference to tax authorities. But, for the industry, it’s making a complete mess,” he adds. Another thing worrying the VCs is the government’s move to ‘plug loopholes’ in the Mauritius DTAA (Double Taxation Avoidance Act) because all their acquisitions/investments in India are routed through Mauritius. Many major VCs, like Canaan, Helion, Clearstone and Sequioa, invest in India through routes like Mauritius. According to estimates, VCs invested about $900 million through this route till last year. Other tax havens with which India has a treaty are Cayman Islands, Singapore and more recently Luxembourg. […]

Cleartrip gets $18.5 million investment

Cleartrip Travel Services Pvt. Ltd has received a third round of funding of $18.5 million (Rs73.58 crore), which brings the total investment in the Mumbai-based travel company to $30.2 million. Venture capital firm Draper Fisher Jurvetson India Advisory Services Pvt. Ltd (DFJ) led the round with a $10 million investment—the firm’s largest in India. DFJ was joined by the Mahindra Group and all the four firms that had previously invested in Cleartrip. India’s travel portals have received a flurry of investment over the past two years since the sector came up in 2005. Since then, the industry has been moving towards consolidation, though the top players are yet to turn profitable. With this investment, Cleartrip joins New Delhi-based Makemytrip India Pvt. Ltd which also got a third round of funding in August. Both are aiming for profitability in 2008 and are on the road to an initial public offering in the next two years. India’s travel portals have received a flurry of investment over the past two years. […]

DE Shaw to invest $250 million in HDIL group company

Real estate firm Housing Development & Infrastructure (HDIL) on Wednesday said the private equity firm DE Shaw is investing $250 million in Mack Star Marketing, an HDIL group company. Mack Star Marketing holds development rights for a 54,000-metre commercial complex being constructed in Andheri. Last week, HDIL had transferred its development rights to this complex to Mack Star for Rs 900 crore. DE Shaw’s investment is in the form of equity and debt. HDIL managing director Sarang Wadhawan said DE Shaw will hold a minority stake, but declined to give details. The investment comes at a turbulent time for India’s capital and real estate markets. The steep meltdown in January and the withdrawal of Emaar MGF’s IPO in February rattled real estate firms who rely on equity to fund their expansion projects. […]

Dabur Pharma weighing PE partner, outright sale

The Dabur Group is learnt to be evaluating a range of options for determining the future direction of Dabur Pharma, the anti-cancer drug company, including a sellout. The options being considered include inducting a private equity investor or a strategic investor, as well as a strategic alliance with a foreign company. It is understood that Dabur Pharma has held discussions with a German pharma company for a partnership, where the possibility of an outright sale has also figured. While Dabur Pharma chairman Mohit Burman was unavailable for comment, CEO Ajay Vij said, “There is no move to induct any partner.” Asked if the company was in touch with any German company for a strategic alliance, he said, “We are in touch with many companies across the globe for hundreds of things, but this (induct a partner or selloff) is pure speculation.” However, a reliable industry source told ET that at present several options are being considered, though no final decision has been taken. A source close to the German company said discussions were at a somewhat advanced stage and the possibility of a total sellout was being actively considered. […]