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Industry experts say unlike in the past when term sheets were signed in six-seven days, the duration has now increased to a month. Fund managers are taking a longer time to make up their minds on investments. They are also agonizing over what valuations ought to be. Some are even backing out of deals. For instance, Indivision, a part of the Future Group backed out of an impending deal with DishTV after signing the term sheet. Sources said, this was because valuations were driven down. Then, sources added, there is the case of General Atlantic Partners backing out of Essar Power, once again, after signing the term sheet. Also, some firms are moving away from plain equity deals to structured ones to protect itself from the market downside. Not just that, they have started to ask for collateral on their investments. Also, the return expectations from high yield structured deals have gone up from 15-18% to 20-25%, a banker explained. […]
The volume of private equity (PE) deals in India is down by 47% in the first 10 weeks of 2008 over the year-ago period, but buyers say they are expecting cash-hungry companies with sharply lower valuations to line up in front of investors following severe declines in stock markets. They say that deal activity will pick up in the next two-six months. Until December, India’s capital markets had been a big competitor to PE. But, now, the capital market option has contracted sharply, stalling plans by many companies to raise funds. While it rose on Tuesday, the Sensex, the benchmark index of the Bombay Stock Exchange, has fallen about 27% since the beginning of 2008. In 2007, it had risen by 47%. […]
Baring Private Equity has bought a 12 percent stake in Indian brokerage ShareKhan for 2.4 billion rupees ($59 million), the Economic Times said in an unsourced report on Wednesday. The deal involved a mix of a stake sale by ShareKhan's biggest shareholder, Citigroup Venture Capital (CVC), and fresh shares, the paper said, adding the deal valued the brokerage at 20 billion rupees. CVC India country head Ajay Relan confirmed ShareKhan had inducted new investors but declined to comment on valuations, the paper said. CVC owns 75 percent of the brokerage and lender Infrastructure Development Finance Co owns 10 percent. […]
Kotak Private Equity Group and Kotak Realty Fund are together looking at investing $300 million in firms in India by the end of this financial year, reports Nishita Saxena in Hyderabad. “Our focus will be on infrastructure, domestic consumption & consumer spending plays besides global manufacturing opportunities. […]
Kishore Biyani-led Future Group is picking up a 70% stake in Aadhaar, Godrej Group’s rural retailing initiative. Sources said Aadhaar, a part of Godrej Agrovet, will be spun off into a special purpose vehicle. Godrej Group will hold a 30% stake in the entity. The deal, likely to be done through Pantaloon Retail, is likely to be sealed in a fortnight. The Future Group will initially scale up Aadhaar on the lines of ITC’s e-choupal, as a supply-chain of commodities and agri-produce. Aadhaar may also become a distributor of the group’s financial products like consumer finance and insurance in the rural markets. Sources said the move makes sense for the Godrej Group which may not have been able to allocate the kind of investment required to make the rural retailing business commercially viable. For the Future Group, the move dovetails with its ambitious rural retailing plans. […]
Private equity and overseas venture capital investments in Indian Companies could soon be included in foreign direct investment (FDI) caps for each sector. That’s the proposal of Reserve Bank of India (RBI) in a draft paper issued on Monday, which includes several new entities under the definition of FDI. If implemented, it would be another major step to monitor the flow of foreign capital into the country. The broadening of the class of investors under FDI nomenclature comes at a time when there is growing debate over the role of sovereign wealth funds and the influence they wield on economies, globally. […]
Osian’s Connoisseurs of Art has signed an agreement to sell an approximately 9.4 per cent stake to Abraaj Capital, Dubai-based private equity firm, for Rs 80 crore. Osian’s valuation, going by this transaction, is Rs 840 crore. Arif Masood Naqvi, vice chairman and group chief executive officer of Abraaj, will join the Osian’s board. Starting with its first auction in 2000, Osian’s, founded by Neville Tuli, has grown into a unique private-sector art institution straddling various sectors of art, films and lately, sports. There is Osian’s archive of visual and textual material which includes rare etchings, lithographs, maps of India, British Indian photography, popular art, cinema publicity material. In 2004, Osian’s acquired film journal Cinemaya, and took over the organising of Cinefan, the film festival. […]
MokshaYug Access (MYA) has received funding of Rs 8.35 crore ($2 million) from a private equity fund Unitus Equity Fund L P (UEF). The investment will enable MYA to build supply chain and infrastructure for dairy farming and healthcare centers, continue to create key market linkages between the rural community and upstream players, strengthen its technological platform to gear the business for volume- driven activities and expand its microfinance arm. MYA will concentrate on developing a franchise model around client-operated healthcare centers and dairy farming units and rolling it out to rural households. MYA will explore partnerships with healthcare service providers and dairy firms to roll out operations in these two verticals. Once a robust business model in dairy and healthcare is in place, MYA plans to roll out an entire range of verticals across rural India to reach one million households by 2010 and five million households by 2013, the company said. […]
Future Capital Holdings announced today that the company acquired 50.1% stake of the paid up equity share capital of Centrum Direct and Centrum Wealth Managers, respectively, on Mar. 12, 2008. Future Capital Holdings, a subsidiary of Pantaloon Retail India, is the financial services arm of the Future group registered as a non-banking financial company. In agreement with PRIL, the company provides financial products and services at malls, stores and retail outlets in India which are owned, controlled or managed by PRIL and its subsidiaries. It has an agreement with ICICI Bank for marketing and distributing credit cards offering loyalty points to customers and is finalizing corporate agency terms with group companies for general insurance products and life insurance products. […]
Investment firm Quantum Equity Advisors said on Monday it has launched a $500 million private equity fund focused on infrastructure in India. Q India Fund will focus on investments in infrastructure projects and companies in India, it said in a statement. India will need $500 billion to $515 billion up to fiscal year 2011/12 to upgrade its infrastructure, a finance ministry report said recently. It said 30 per cent of the total spending is expected to come from private firms. “This has created a tremendous opportunity for private equity in infrastructure over the coming years,” the statement said. (Sify) […]
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