April 2008
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Karvy plans to acquire NBFC by May

Financial services provider Karvy Stock Broking (KSBL) is in advanced stages of negotiations to acquire a Non-Banking Finance Company (NBFC). If all goes well, Karvy expects to seal the deal by next month, a top company official said. “Four to five NBFCs have approached Karvy with proposals and the company is examining that. Karvy would finalise the target company by mid May,” the official said. Though Karvy had earlier opted to apply for an NBFC licence, the company would now prefer to buy an established NBFC having a good track-record, the official said. However the details of the NBFCs, who have been approached by Karvy, are not known. But the company is understood to be in talks with two to three south-based NBFCs. Karvy is one of the fast growing financial services provider in India and has operations in segments such as stock, commodities and insurance broking, investment banking, mutual funds distribution and depository services. […]

VC Funding – Healthcare Sector

It is a segment that is still considered to be in its infancy, but that has not deterred investors who poured close to $100 million (around Rs400 crore) into health care firms through 2007, up from $41 million in 2006. Venture capitalists (VCs) invested a total of $928 million in entrepreneurial companies in India during 2007, according to the India Venture Capital Report, published by Dow Jones VentureSource. Companies in the health care sector accounted for more than one-tenth of this investment. This year, the country’s oldest and largest private equity firm, ICICI Venture Fund Management Co. Ltd, is upping the ante. It has launched a new firm, Iven Medicare, that will lead all investments in this sector. To begin with, the firm has finalized four deals totalling close to $70 million, with three more deals in the pipeline. It is not just health infrastructure, such as hospitals and diagnostic laboratories, that is attracting investor attention. Start-ups focused on rural health care, online medical services, design and manufacture of medical devices and specialized services such as telemedicine and teleradiology are also raising equity capital. […]

Investments from PE firms slowing down

The turmoil in the stock markets is showing. The private equity (PE) investors who were considered the step-through in the investment chain are cooling their investments. Worse still, the feeling is that this may continue in the following quarters. Venture Intelligence, a research firm focused on PE and VC investments, said in a statement, that during January-March 2008 quarter investments worth $3.30 billion across 97 deals were completed. However, on a sequential basis, during the October-December quarter, 131 deals saw as much as $5 billion invested. For the corresponding quarter January-March 2007 though $2.70 billion got invested in 101 entities. […]

Ask plans PE fund with initial corpus of $100 mn

After exiting its stake holding in the institutional broking arm JM Financial Ask Securities, Ask group plans to launch a private equity with an initial corpus of $100 million, besides a real estate fund by June, a top official said. Ask Group had recently sold its 40 per cent stake in the broking JV to the majority shareholder, JM Financial, for a consideration of Rs 81 crore. Ask Group's Chairman Asit Koticha told PTI that the firm is set to launch a private equity fund in 2-3 months with an initial corpus of USD 100 million and is in talks with more potential investors to invest in the fund. […]

IDFC PE invests Rs 40 cr in Emergent Ventures

Infrastructure-focused private equity investor IDFC PE today said it has pumped in Rs 40 crore in Emergent Ventures India, a carbon credit advisory firm. “We have been actively exploring investment opportunities in the area of clean and renewable energy. We look forward to partnering with Emergent Ventures in delivering green solutions,” IDFC PE MD Satish Mandhana said. The investment made by IDFC PE would be utilised to enhance Emergent Ventures' existing businesses in South and South-east Asia, IDFC PE said in a statement. Emergent Ventures provides solutions under the UN Clean Development Mechanism programme, which range from project origination to assistance with project implementation and the monitoring or delivery of certified and voluntary emission receipts in the domestic and international carbon market. […]

Citi Venture, AIG scrap Akruti investment plan

Adverse market conditions have affected another major real estate transaction. Leading financial institutions — Citi Venture Capital and AIG — have called off their Rs 1,500-crore deal with real estate developer Akruti City which would have seen the foreign funds picking up 16% equity in the Mumbai-based realty player. In January, Citi and AIG had proposed to pick up equity in Akruti through a preferential allotment, where Akruti would place up to 10.7 million shares. The firm has now cited market conditions and delay in getting government approval as reasons for aborting the deal. The BSE Realty index has crashed 46% from its peak of 13,647 recorded on January 14. “In view of the inordinate delay in receiving necessary approvals from the Department of Industrial Promotion and Policy (DIPP), coupled with uncertain market conditions, we have decided not to proceed further with the proposed issue with the foreign funds,” Akruti City managing director Vimal Shah said. However, sources said that after the market fall, differences of opinion had cropped up between the foreign funds and the real estate firm on valuations which ultimately led to a deal abortion. […]

PEs invest $3.3 bn in Jan-Mar 2008

PE firms invested about $3.3 billion in the first three months of this year, $0.6 billion more than in the same period last year, according to a study by Venture Intelligence, a research service focused on PE and venture capital. “Last year, PEs competed with the public markets for investments. If the competition for public markets slows down, then more deals will get done among companies that see PE as an alternative to raising money from the markets,” said Venture Intelligence founder & CEO Arun Natarajan. Mr Natarajan added that the choppy market conditions would not be conducive for Pre-IPO and PIPE (private investment in public equity) deals in the medium term. Also, the spurt in deals in the late stage segment account for 60% of the amount invested during Q1 2008. The amount invested during the quarter was higher than that during the same period last year (which witnessed 101 deals totaling $2.7 billion) but lower compared to the immediate previous quarter (which witnessed 131 deals totaling $5 billion). […]

Jubilant Organosys to acquire Draxis Health for $255 mn

Jubilant Organosys Ltd said on Friday it plans to buy Canada's Draxis Health for about $255 million as it seeks entry into North America's key radiopharmaceutical sector. Jubilant said it would pay $6.00 a share for all the outstanding shares of the specialty health-care company. Draxis's board has approved the transaction and recommends that shareholders accept the offer. “Draxis represents a unique opportunity in the North American market, offering Jubilant entry into the attractive, regulated, high-growth and high-margin radiopharmaceutical business,” Jubilant said in a release. “It also enables Jubilant to consolidate its position in the sterile and non-sterile contract manufacturing business.” The two key platforms at Quebec-based Draxis are its Draximage radiopharmaceutical division and its contract manufacturing business. Competition in the nuclear isotope business was ratcheted up recently after a U.S. company bought a similar operation from Bristol Myers Squibb. […]

USL may acquire minority stake in Bacardi

Vijay Mallya`s United Spirits (USL) might acquire a minority stake in Bacardi, which will enable Bacardi to pursue acquisition opportunities in India, reports Economic Times. Bacardi has revealed that the company will be interested in USL`s potential move for private placement of treasury stocks with a strategic partner, although currently nothing is at work with USL. Bacardi is looking at inorganic growth opportunities provided it is profitable and carries distribution muscle. Earlier this year, Mallya had received unsolicited interests from several suitors for buying a small stake in USL. In January, UK-based spirit giant Diageo, makers of Johnnie Walker whiskies and Smirnoff vodka, had held talks with USL for acquiring the company`s stakes. […]