April 2008
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Kotak PE pumps in $50 m into biotech cos

Kotak Private Equity Group (KPEG), part of the Kotak Investment Advisors Ltd (KIAL), has investing about $50 million in five unlisted life sciences Companies in India during the financial year 2008-09. Kotak's investment has been divided in Companies focused on clinical research, contract research and new drug delivery systems (NDDS). Apart from its life sciences fund (Kotak India Venture Fund 1) of $68 million, KIAL has raised two other funds of $160 million (India Growth Fund 1) and $415 million (Kotak India Growth Fund), with its cumulative fund under management is to the tune of $1.4 billion. It has also decided to raise $1 billion infrastructure fund during the financial year and will invest in sectors such as power and transportation. Nitin Deshmukh, CEO, private equity, KIAL, told FE, “Though the Companies where we wanted to invest are small, new molecules and drug delivery systems developed by them have high potential.” So far, KPEG has invested about $50 million in various small-sized life sciences Companies in India such as Metahelix Lifesciences Ltd, VLife Sciences Ltd, Indus Biotech and Rubicon Research by picking up 20-25% stake in each company. […]

Future Logistics to raise $25 million

The logistics arm of Future Group, Future Logistics Solutions Ltd, or FLSL, will raise $25 million (Rs10 crore) by selling stakes in the venture to private equity firms, the group’s chief Kishore Biyani said. “We are in talks with five Indian and foreign private equity companies and a deal is expected in a month,” said Anshuman Singh, chief executive of FLSL. “We have just entered the valuation phase,” he said, adding that the private equity companies are yet to figure out the actual valuation of the firm that takes care of most of Future Group’s logistical apparatus. How much stake it will off-load will depend on the final valuation, Singh said. Biyani has said in the past that he wants to raise money by selling stake in subsidiaries including Future Media India Ltd, and FLSL to fund the company’s retail plans. […]

VGI announced USD 1 billion India infrastructure fund

The Principals of VGI DLC announced the launch of Vision Global Investments I, a U.S. $1 billion dollar India infrastructure-focused fund. The Fund brings a “force multiplier” to its investors through an experienced and skilled team of U.S.-based investment professionals, and practiced and highly knowledgeable India-based entities SREI Infrastructure Finance Ltd. and Primadona Global Holdings WWL. With offices in New York, London, Delhi, and most recently Bahrain, as well as an advisory office in Mumbai, VGI I is the group’s initial offering. Vision Global Investment’s India Infrastructure Fund I will focus its investments on opportunities that directly contribute to the essential infrastructure improvements needed to support the country’s continued economic growth. The fund is seeking institutional class investors from the U.S., Europe and selectively from the Middle East, Southeast Asia and Japan where there is considerable interest in this asset class. […]

Biocon to buy US firm for $400 mn

After gaining a foothold in the European market with the acquisition of German drug marketing firm AxiCorp GmbH in February, India’s Biocon Ltd now has set its sights on the US pharma distribution market with a deal valued at about $400 million (Rs1,595 crore). The Bangalore-based biotech firm has been scouting for an acquisition in the US that will sell its pharmaceutical products such as generics, biosimilars and biologics in the world’s largest drug market. “The deal, if signed, will be Biocon’s second and the largest overseas acquisition in the marketing space,” said a person familiar with the development who did not wish to be identified. “If everything goes smoothly…the company may even announce the deal along with its fourth quarter results on 22 April,” this person added. A Biocon spokesperson declined to comment as the firm is in the silent period ahead of the announcement of its quarterly results in keeping with the guidelines of stock market regulator Securities and Exchange Board of India (Sebi). […]

PE deals hit the road again, but M&As dry up

Private equity deals appear to be back on track even as strategic acquirers seem to be holding back after the market meltdown in January dented corporate valuations. According to data for March, the number of PE deals jumped 20% compared to February, while strategic mergers and acquisitions (M&As) continued to shrink. As many as 34 PE deals were announced in March, compared to 28 in the previous month. While PE deals have picked up, large deals have dried out. Just one $100 million-plus deal was inked during the month against 7-8 such deals each during January and February, according to the latest deal tracker of advisory firm Grant Thorton. This is also reflected in the cumulative value of PE deals, which is down by almost half at $960 million, from $1.73 billion in February. The data collates the value of announced deals and would be higher than the actual PE fund flows as some transactions take time to close. The largest PE deal in March saw Singapore’s Orient Global Tamarind Fund picking 2.6% stake in Cairn India for $278.7 million. […]

PE, VC funds back in demand

The recent crash in the stock market, among a host of other things, has made the life of people managing venture capital (VC) and private equity (PE) funds a lot easier. Companies, which till recently had the option to either get VC funding or tap the primary market directly, are now finding the second route nearly closed. And a resultant effect is that top VCs are again being pursued by companies looking for funds, top officials at VC-PE funds said. This is a welcome change from the days when some of the VCs even went to companies to convince them to take funds from them. Till about January this year, VC and PE funds almost had to make companies understand that there was greater value in taking money from them than tapping the capital market directly. But the irrational valuations that the market gave to all and sundry made a number of entrepreneurs greedy. […]

Naukri.com promoter turns venture capitalist

Online services firm Info Edge (India) Ltd, which owns jobs portal Naukri.com and matrimonial website Jeevansathi.com, plans to join the ranks of venture capitalists, says a top company official. The Noida-based company, which made its first investment in Delhi-based education portal StudyPlaces Inc. earlier this year, says it has decided to acquire equity stakes in Internet start-ups as part of its growth strategy. “We are currently looking at a couple of companies in the Internet and mobile space,” says Hitesh Oberoi, director and chief operating officer of Info Edge. The company plans to target early-stage companies that can benefit from its distribution channels such as offline operations, business relationships, and site traffic. It is looking at potential investments between $1 million and $4 million per deal. In return, Info Edge can bolster its own offerings with services the start-ups bring to the table, and establish a presence in new niche areas. For example, the company, which plans to launch its own education information search portal later this month, might explore synergies between StudyPlaces and its own offerings. […]

Tele Atlas buys stake in Kalyani Group's KNVL

Tele Atlas, a leading global provider of digital maps, navigation and location-based services (LBS), has signed a definitive agreement with the Kalyani Group to acquire substantial equity stake in the Pune-based Kalyani Net Ventures. (KNVL). The size of the transaction has not been disclosed. After closure of the deal, the company will be renamed Tele Atlas Kalyani India, said a press release. Tele Atlas is listed on the Frankfurt Stock Exchange and on Euronext Amsterdam (TA) and offers digital map coverage of more than 200 countries and territories worldwide. […]

Private equity tap runs dry for realty firms

Private equity firms, which were once hot on Indian real estate, have of late turned wary of investing in realty companies whose shares have been hit by a worldwide slide in stock prices. Placement deals worth between Rs 15,000 crore and Rs 20,000 crore by Indian realty firms have been put on the hold, according to investment bankers tracking the matter. “Although investors are willing to renegotiate prices, the companies cannot make any placement because regulations do not permit them,” said Yogesh Kapur, vice-president at Enam Financial. The Securities and Exchange Board of India prohibits listed companies from making private placements at prices below the average for six weeks or six months, whichever is higher. […]

Surge in Indian PE deal mkt attracts new foreign players

Most PE or VC firms, which arrived in India in past 12 months, are perhaps finding the going a little tough. There seem to be quite a few firms which have done no deals yet, or at best one or two deals in say 12 months of being active in India. In other words, many of these firms are as yet finding their way around in the Indian markets. A look at the data would also give some indication. In the first quarter of 2008 (Jan-Mar), private equity firms invested about $3.3 billion in 97 deals according to Venture Intelligence. In Jan-Mar 2007, there were 101 deals. So while the number of PE firms is perhaps up 15-20% in the same period, the number of deals going around is roughly the same. The learning here is simple — traditional PE models which apply in say, US or Europe, may not always work in India. For example, it is hard to do large deals in India, for more than one reasons — supply remains low, consequently valuations are often an issue. Deals like buyouts are still harder. […]