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Indian mortgage lender Dewan Housing Finance Corp Ltd plans to raise $100 million for a private equity fund by June-end, a top official said on Monday. The money is part of the $250 million the company plans to raise for the private equity fund by March 2009, Vice-Chairman and Managing Director Kapil Wadhawan said. Initial investors for the fund would be from the Middle East and the UK and more than half the corpus would be allocated towards real estate projects in Tier-II and Tier-III cities, he said. It had earlier raised 1 billion rupees for another private equity fund and the entire corpus has been invested in various real estate projects, Wadhawan said. […]
Even as numbers of private equity deals fell in the later half of April 2008, real estate seemed to suck in whatever was available. Around 78 per cent of the private equity money went into real estate in the period. For the four months January-April 2008, 33 per cent of private equity money has gone into real estate according to a report by global audit and consulting firm Grant Thornton. Real estate is tailed by power at 17 per cent. Another global firm Dealogic has identified India as the second biggest private equity destination for 2008 in Asia, with Japan in the lead. The total number of deals in the second half of April was only eight compared to 24 deals in the first fortnight. The slowing down comes after a active period that saw 156 deals being struck in the first four months of 2008, the Grant Thornton report said. […]
Global private equity companies are no longer interested in investing in pure pharmaceutical research and development companies with less attractive pipelines and in early-stage drug development, said Steve Arlington, global pharmaceuticals advisory services leader, PricewaterhouseCoopers (PwC). “Private equity players look at returns in the short run and drug discovery research is a high-risk business involving big investment for a longer period of 10-15 years. They prefer to invest in contract research companies or clinical trial companies or those having promising drug pipelines and products in late-stage clinical trials,” he said. In a recent trend, India's leading drug companies have hived off their R&D assets to separate companies to insulate the investors of parent companies from risks associated with long-term drug research, and to attract private equity funding for drug research. The hived-off facilities are yet to announce any private equity participation or strategic investment. […]
From the market participant’s point of view, research from KPMG points out that there are 255 active funds in India and many more heavyweights like KKR and Bain waiting to come in. So, the party is set to get bigger. In terms of sheer influence, PE nominees sit on boards of more than 1000 Indian companies and that includes some of the largest Indian companies like Bharti, Tata Teleservices , Idea and Pantaloon. The peripheral industry around PE is already worth more than $100 million and growing. The numbers may be small when taken in the global context, but for a sector that truly came on its own just four years ago, it’s a remarkable footprint. In the late 90s, you could count funds on your fingers – Baring , CDC Capital, Draper, HSBC Private Equity, Warburg Pincus, Chrysalis Capital. Now even I-bankers feign ignorance over some exotic sounding funds. It’s not an 800-pound gorilla yet, but it’s well on its way to becoming one. […]
Private equity (PE) firms seem to have sharply improved the fortunes of some of their investee companies. Data collected by Four-S Services — a research, financial consulting and business content services provider — show that companies with PE funding have performed much better in terms of operational efficiency vis-a-vis similar-sized non-PE backed firms. In India, private equity has moved on from being just a financier and stakeholder to expertise creator. It helps investee companies in a host of activities — forging strategic alliances, assisting in corporate governance and providing management advice. The Four-S Services study has found a positive difference in the sales growth of PE-backed and non-PE backed companies. Between 2002-03 and 2006-07, PE-funded companies witnessed sales growth of 27.5 per cent (four-year CAGR) compared to the 18.6 per cent growth for non-PE backed firms. […]
Bharti Airtel is learnt to be evaluating the option of forging a consortium comprising key MTN shareholders, the Mikati family and the employee-owned Newshelf, and possibly SingTel, in its bid for the South African telco. While the Mikati family and Newshelf through the Alpine Trust own 23% in MTN, it is believed that in addition, Bharti will try to negotiate an agreement with MTN shareholders to pick up 30% equity and make an open offer for another 20%. The consortium will thus hold around 74%. In return, a structure may be devised which will enable the Mikati family and Newshelf to indirectly hold shares in Bharti Airtel. The Bharti spokesperson refused to comment on the development. ET has been unable to obtain individual confirmations on these developments from Bharti Airtel’s top executives. A reliable source told ET that Bharti is looking at several options and will take its time before proceeding further. The Bharti top brass, including chairman Sunil Mittal, who met with top MTN officials earlier this week in London, have returned. […]
Steel coil and sheet maker Shree Precoated Steels Ltd, or SPSL, plans to sell 10-15% of its stake to a private equity fund to raise about Rs700 crore, said its managing director R.S. Ajmera. The publicly traded company is talking with potential investors including ICICI Venture Ltd, said an investment banker associated with the deal, who did not want to be identified. The deal size is not yet finalized, but a company executive who did not want to be named said the money raised could be Rs800-900 crore. The company expects to close the deal by end of May. DSP Merrill Lynch Ltd’s investment banking unit is advising the firm. SPSL’s promoters currently own 62% of its stake. Foreign institutional investors own 12%, with Citigroup Global Markets Mauritius Pvt. Ltd holding 1.18%, Merrill Lynch Capital Markets Espana SA 1.9%, and Passport Capital Llc. 4.9%. The company has a market capitalization of around Rs2,317 crore on the Bombay Stock Exchange. […]
Wherever there’s a whiff of money, they are likely to be the first ones on the spot. No surprise then that financial whizkids – whether from private equity (PE), investment banking or even conventional banking – are keeping close tabs on IPL. With IPL already worth close to $2 billion and teams needing to fork out close to Rs 600 crore every year combined, they are restless for a piece of the action. Most PE funds target 25-30% annual returns, irrespective of which way the market goes. Given the fanatical following cricket gets in India and the possibility that the league will be even bigger next year, the game, they believe, offers as a good an opportunity as the corporate world. While they’re proceeding with caution, they’re clear it is important to open their account in this game early. Arun Natarajan of Venture Intelligence, a private equity research firm, believes the IPL is a good fit for PE firms given that they tend to favour businesses that cater to a large mass of consumers. […]
Three private equity investors — Blackstone, New Vernon and Reliance (part of ADAG) have picked up equity shares and warrants in the Chennai-based Everonn Systems Ltd, a company specializing in e-learning and virtual classrooms. P Kishore, managing director, Everonn told TOI that the company has raised Rs 167.89 crore from the PE investors besides a equity warrant issue to the promoters. Deutsche Securities (represented by Reliance), The India Fund Inc of Blackstone and New Vernon will invest Rs 91.39 crore immediately. The promoters would pump in Rs 50 crore towards the warrant issue. In all the dilution would be around 9% of the company's equity. […]
India's bull run in the private equity (PE) sphere gets hotter, as a whopping $1.3 billion in PE funding was cemented at the recently held India Private Equity Fair 2008, in Mumbai. The event, was organized by Yen Expo, part of Mumbai-based merchant banking firm, Yen Management Consultancy. The fair was attended by a large number of PE players, venture capital firms, high-net worth individuals and angel investors. As per a report by consultancy firm Grant Thornton a total of 32 PE deals valued at $560 million were announced in April 08. March saw greater PE action as funding worth $1.2 billion has entered the country. PE players like Goldman Sachs, LightSpeed Venture Partners, Axis Private Equity, Actis PE, Tano Capital have a combined investment line up of $500 million, deals of which will be signed in the coming months. The sectors to benefit this PE windfall include real estate, hospitality, infrastructure, pharma, biotech, automotive, telecom, media and IT. Large PE deals of over $100 million have come down in recent months, but going forward the deal size is likely to grow bigger at $200 million and above. […]
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