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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. […]
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, 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 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. […]
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. […]
J K Tyre has acquired Mexican tyre company, Tornel for Rs 270 crore to become India's fourth largest four-wheeler tyre company. JK Tyres' turnover will now exceed USD 1 billion. The company will fund the acquisition through a mix of internal accruals and debt. This buyout is expected to be completed by the end of May, subject to regulatory approvals. The acquisition makes a strategic fit for JK Tyres as it is already the largest exporter, exporting almost 48% to the North and South American Markets. Mexico-based Tornel offers free access to the NAFTA trade block and Central and Southern America. Therefore, together both the companies would considerably strengthen the market positioning in these territories. […]
Breaking from the tradition, the $5 billion TVS Group has, for the first time, let a private equity investor Goldman Sachs invest nearly Rs. 100 crore and pick up an undisclosed minority stake in the Rs. 338-crore turnover TVS Logistics Services Ltd., setting the stage for an eventual IPO (initial public offer). TVS Logistics is hoping to use the money, reach and contact of Goldman Sachs to further speed up its growth. The company has set itself a turnover target of Rs. 1,000 crore to be hit by 2010. Addressing a press conference here on Friday, Suresh Krishna, Chairman, TVS Logistics, said the private equity (PE) option was forced by “market reality”. Answering a volley of questions, he said the PE money did not come through stake sale. It came via issue of additional shares at a premium, he added. The equity capital of the company stood at Rs. 12 crore prior to the induction of the PE fund. “We will go in for an IPO at an appropriate time. We will wait for the right time,” he added. R. Dinesh, Operating Director, however, said it (IPO) would not be in the next 18 months. […]
Anil Ambani-owned Reliance Big Entertainment Ltd (RBEL) on Wednesday said it acquired 100 per cent stake in the digital images business of the US-based DTS Inc, marking its first overseas acquisition in the digital-services space. DTS Digital Images (DDI), popularly known as Lowry Digital Images, is engaged in independent restoration operation in Hollywood, providing picture quality improvement services to movies, television and video content. It is considered to be a market leader in the field of digital restoration and enhancement of moving pictures, using proprietary tools and algorithms it has developed over the years. DDI works with Walt Disney, Paramount Pictures, MGM and 20th Century Fox and entertainment leaders like George Lucas and James Cameron. It has restored more than 300 of the world’s most recognised feature films with output to DVD, HiDef, 35mm film, Digital Cinema, and IMAX. Its body of work includes Casablanca, Singing in the Rain, Sunset Boulevard, Indiana Jones trilogy, Star Wars trilogy, James Bond films and numerous Disney classics such as Cinderella, Bambi, 101 Dalmatians and Lady and the Tramp. […]
John Keells Holdings (JKH), the largest public conglomerate in Sri Lanka, has picked up 44% stake in Quatrro F&A. Quatrro, along with John Keells, has acquired US-based RSM McGladrey’s financial process outsourcing (FPO) unit. Quatrro F&A is the new entity formed after the merger of Quatrro’s finance & accounting unit with the newly-acquired FPO. As part of the deal, John Keells will shell out $5.72 million upfront and will bring in additional funds over a period of time for the FPO acquisition. “We have carved out a new legal entity from the merger of our own finance and accounting practice and RSM’s FPO unit. John Keells has picked up 44% stake in this new entity,” said Quatrro CMD Raman Roy. The acquisition of the FPO unit would be financed through a mix of debt and equity. […]
Real estate and textile firm Modern India Ltd said it is in talks with private equity players to dilute the founders' holding and also sell stake in its special economic zone unit, its top official said. “We are in talks with 2-3 players, and we will finalise in the next one to one and a half months”, Chairman and Managing Director V K Jatia told Reuters on Friday. The firm's monthly rental will more than double to 20 million rupees after June, from between 7.5 million and 8 million rupees a year ago, due to an increase in rental income, Jatia added.(Reuters) […]
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