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A technical factor seems to be hindering PIPE (private investment in public enterprises) deals or private investments in public enterprises, which should have been a no-brainer with shares of listed companies now quoting at eye-catchingly attractive valuations. According to rules set by the Securities and Exchange Board of India (SEBI), the preferential allotment of shares (which is necessary to consummate a PIPE deal) have to be done at a price, which is higher of the following two: 26-week average of the weekly high and low closing prices of shares as quoted on the stock exchanges where the shares of the target company are most frequently traded or average of the daily high and low prices of shares during the two weeks prior to the date of the preferential allotment. With such a clause, the price that private equity players have to shell out for stakes in companies is still relatively high. […]
Indian drug maker Dabur Pharma Ltd said on Saturday its founders and other shareholders have agreed to sell 73.27 percent in the company to Fresenius Kabi (Singapore) Pte Ltd, at 76.50 rupees a share. The Singapore firm is a unit of European healthcare firm Fresenius SE . The Indian firm, which makes anti-cancer drugs, had earlier this year denied it was in talks with a German drug maker for a partnership or sale. The deal with Fresenius values it about 10 percent higher from its market capitalisation of $273 million. Last year, the company had sold its non-oncology drugs business to local rival Alembic to focus on cancer treatment drugs.(Reuters) […]
Nakoda Textile Industries, the country's largest player in the fully drawn yarn (FDY) segment, is in talks with a London-based private equity player for equity dilution. Investment banking sources said the company will sell around 10% equity for Rs 30 crore to fund its expansion plans. The deal is likely to be sealed this year. The company plans to invest Rs 325 crore for enhancing capacity. It will raise Rs 225 crore as debt, Rs 30 crore through sale of promoters' equity and the rest from internal accruals, apart from PE funding. Babubhai Jain, chairman and managing director, Nakoda Textile Industries told DNA Money, “We are looking for PE funding, but nothing has been finalised yet.” […]
Wipro chairman Azim Premji, among the richest Indians, is casting his net wider. Known as an astute investor who picked stocks in his personal capacity across an array of undervalued but promising companies, Mr Premji is now launching a private equity fund with an investible corpus of at least $1 billion. The fund, PremjiInvest, is expected to be sector-agnostic. And if insiders are to be believed, it may even shun pure-play IT services companies. As a first step, Mr Premji named Sudip Banerjee, who till recently was president of the enterprise solutions business, as director on the advisory board of PremjiInvest. This is probably the biggest private equity play by a domestic corporate honcho. However, there are India-origin funds that are bigger—ICICI Ventures, for instance. With about 80% stake in Wipro, Mr Premji’s wealth in terms of market capitalisation is pegged at around Rs 68,000 crore. And the 61-year-old promoter is believed to be taking home well over Rs 500 crore in dividends and salary annually. […]
Britain's leading retailer Marks and Spencer Group (Marks & Spencer) announced its joint venture with Mukesh Ambani-promoted Reliance Retail on Friday, involving an initial investment of £29 million (Rs 230 crore), with plans to set up 50 stores over the next five years. M&S plans to pick up majority stake of 51% in the joint venture, Marks and Spencer Reliance India Pvt Ltd, while the balance will be held by Reliance Retail, once its application is cleared by the Foreign Investment Promotion Board. The UK-based clothing and food retailer expects to increase sourcing from India and bring into the country a wide range of products from its global portfolio through its proposed stores. “We intend to open bigger stores, selling a wider range of products at lower prices, including a growing number of products sourced from local suppliers,” Marks and Spencer Reliance India CEO Mark Ashman said. […]
Israeli investment firm Koor Industries Ltd. intends to buy a 10-percent stake in pan-India cellular operator Tata Tele Services Ltd. for $577 million to $720 million, the Economic Times reported. The report said Koor, a group company of Israel's largest cellular operator Cellcom, has submitted an initial letter of intent (LoI) regarding the investment with the Tel Aviv Stock Exchange. In the LoI, Koor said it is considering acquisition of a 'substantial minority interest in the communications company' and the process was 'preliminary', the report said, adding that investment bankers peg this stake at 10 percent. According to unnamed sources, Tata Group is looking at equity dilution in TTSL, but will retain majority control with a 51 percent stake, said the report. A company spokesperson declined to comment. […]
The Asian Development Bank (ADB) is going to help develop clean energy projects in Asia including India. With an initial seed capital of $100 million, ADB will help establish five private sector funds, which are expected to invest around $1.2 billion in such projects across Asia. The funds – MAP Clean Energy Fund, China Environment Fund III, GEF South Asia Clean Energy Fund, Asia Clean Energy Fund, and China Clean Energy Capital – will each receive up to $20 million in capital from ADB. GEF South Asia Clean Energy Fund has a target size of $200 million and will make around 12 investments across South Asia in companies and projects that promote the use of efficient and cleaner forms of energy in Bangladesh, India, Nepal, Pakistan, and Sri Lanka. The fund is jointly sponsored by India’s Yes Bank and an international private equity firm, Global Environment Fund. […]
Indian real estate developer Lodha Group said on Thursday it has sold 45 percent stake in a residential-cum-commercial project at Hyderabad, to HDFC Sponsored Funds for $54 million. The Mumbai-focused company plans to develop a 2.5-million sq ft luxury township in Hyderabad, its first project in the south Indian city. Last year, it had acquired 12.9 acres of land there, for 2.56 billion rupees. The project is to be completed in 42 months. HDFC Sponsored Funds comprise offshore funds sponsored and advised by HDFC Ventures, the company said. The deal would be through the foreign direct investment route. […]
Financial Times publisher Pearson has sold its 13.85 percent stake in Indian business daily Business Standard for an undisclosed sum, the Indian newspaper said on Friday. The stake was sold to Infina Finance Pvt Ltd, an associate of India's Kotak Mahindra Group, it said. Business Standard and the FT have “realigned the licence agreement … whereby Business Standard will continue to have access to FT content till the end of the year”, the paper said in a note on its front page. Pearson, whose India business also includes Penguin Books and Pearson Education, said recently it would significantly increase investment in the fast-growing economy over the next three years. Revenue for newspapers in India grew 17 percent in 2007, according to estimates by PricewaterHouseCoopers, and some local media reports have indicated that Pearson may seal a deal with a new venture partner for its Financial Times daily. Foreign firms can own up to 26 percent in Indian newspapers. (Reuters) […]
GMR Infrastructure has announced that its wholly-owned subsidiary GMR Energy (GEL) has acquired 5 percent equity stake in South Africa’s Homeland Mining and Energy SA (Pty) Ltd, a unit of Canada’s Homeland Energy Group Ltd. GEL has paid Rs 60 crore ($15 million) for the 5 percent stake in the company. Further GEL has an option to purchase an additional 45 percent in the same company by September 2008 for $145 million. In this way, the total payout for the 50 percent stake is $155 million (approx. Rs 620 crore). In a statement, GMR Infrastructure said, “This acquisition would ensure fuel security for GMR group's power projects in India and such a transaction also acts as a catalyst in the development of the energy business of the Group.” […]
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