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Citi looking to sell Indian BPO and tech units

Citigroup is looking to restructure its Indian back office operations and put its BPO and technology divisions up for sale, according to local press reports which cite IBM as the “lead contender” for the assets. Economic Times says the US bank, which has been badly hit by the credit crunch, is set to overhaul its back office operations in India – which are valued at around $1 billion – and sell off its Mumbai-based BPO operation – Citigroup Global Services – as well as its Citos unit which provides outsourced technology and infrastructure services. IBM Global Services is leading the race for the units, although European IT consultancy Capgemini and Indian outfit Tata Consultancy Services (TCS) are also in the running, says the Economic Times. Citi and IBM have so far refused to comment. […]

Unitech to offload 26% in telecom arm

Country's second largest real estate player Unitech Ltd today said it would dilute 26 per cent stake in its telecom arm to a strategic foreign partner, for which it was in discussion with a few telecom firms “We are looking for a minority dilution of 26 per cent stake to a strategic foreign player in Unitech Wireless,” Unitech Ltd managing director Mr Sanjay Chandra told reporters. Unitech Wireless, which has bagged a pan-India GSM licence, has already got the crucial spectrum for five circles. (Statesman) […]

PE firms seen taking fund-of-funds route

Private equity as an asset class has been badly hit in the ongoing global financial crisis. But, there is no taking away from India, which has over the last few years emerged as a region of choice for a large number of overseas investors who want an exposure to this asset class. That said, the general risk aversion brought on by the credit crunch the world over may pave the way for a private equity investment structure that is not yet very popular in the country: fund of funds (FoF). Asieh Mansour, managing director and chief economist and strategist for RREEF Alternative Investments, the global alternative investment management business of Deutsche Bank said, “Across surveys that we've conducted, the message is clear that overseas investors have the Asian region, including India, on top of their radars, but would rather opt to invest via a fund of funds than maintain direct relationships with a 100 private equity funds that may be operating in the region.” […]

PE firms line up $2 bn for maritime logistics

Private equity and venture capital investors are readying funds in excess of $2 billion (about Rs8,500 crore) to invest in India’s maritime infrastructure and logistics, as the country strengthens cargo handling facilities to meet rising demand for exports and imports. About 95% of India’s external trade by volume and 70% by value move by sea, but cargo handling and logistic costs are high because of deficient infrastructure and delays in shipments. “The sector is underdeveloped in terms of setting up of port capacities and related support infrastructure,” said Vipin Agarwal, assistant vice-president at Kotak Private Equity, part of the Kotak Mahindra Group. “As a result, the sector will witness lot of expansion activities.” The national maritime development programme, drafted by the shipping ministry, envisages an investment of Rs1 trillion to spruce up India’s maritime sector including ports, shipyards, marine logistics parks, inland container depots and related support services. Of this investment, 64% is expected to come from private firms. […]

Rice king faces hostile takeover

Suddenly, the aroma of Indian basmati has got mixed up with the scent of gunpowder. A bitter battle is brewing as India’s biggest player in the rice market, Kohinoor Foods (formerly Satnam Overseas), which accounts for about 38% of the country’s basmati market, is trying to ward off what it sees as a hostile takeover bid. The Kohinoor management has petitioned the Securities and Exchange Board of India and Company Law Board (CLB) accusing Mumbai-based Temptation Foods Ltd of leading a consortium that has covertly acquired a shareholding of almost 30% in Kohinoor Foods. These frantic calls to SEBI and CLB have happened in the last 15 days. The acquisitions, Kohinoor’s petitions to Sebi and CLB alleged, are in violation of the market watchdog’s takeover code, which mandates public disclosure by anybody seeking to acquire more than 15% of a company. It sought an ex parte interim stay from CLB on any further acquisition of Kohinoor shares by Temptation and 45 other entities listed as ‘‘acting in concert’’ with Temptation and a suspension of their voting rights. […]

Star, Balaji to part ways soon

In one of the biggest splits in the media and entertainment industry, Star India, one of India's leading broadcasters, will soon part ways with Balaji Telefilms, known for its saas-bahu serials. Star, which holds 25.99 per cent stake in Balaji through Asian Broadcasting, is looking at selling its stake. Sources close to the developments said the exclusivity contract between the two firms may not be renewed. While Balaji has the first right of refusal, sources close to the company said the its promoters were not inclined to buy Star's stake. Since this opens the door for Star to sell its stake to a third party, negotiations are on with investment bankers to find potential buyers. Jeetendra, Shobha Kapoor, Tushar Kapoor and Ramesh Gopaldas Sippy together hold 40.01 per cent stake in Balaji. […]

Venture capital firm Walden to re-enter India

San Francisco-based venture capital (VC) firm Walden International – better known for its investment in Bangalore-based IT firm Mindtree Consulting – is re-entering India after a five-year-long hiatus. It has appointed Rajesh Subramaniam, the erstwhile Chief Financial Officer of BPO firm Firstsource Solutions, as Managing Director (for India) – reflecting the increasing demand from the VC industry for senior officials with operational knowledge from diverse industries. Walden is looking at making sector agnostic ‘early to expansion stage’ investments in start-ups that have a scalable business model, Subramaniam told Business Line. “The growing pace of domestic consumption of products and services in India is prompting Walden to commit serious capital and time to India,” said Subramaniam. Founded in 1987, Walden has over $ 1.6 billion (Rs 672 crore) in committed capital. […]

Frontline Strategy takes 26% in Shriram SEPL

Mauritius-based Frontline Strategy's India Industrial Growth (IIG) Fund has picked up a 26 per cent take in Shriram SEPL Composites, a joint venture of Shriram EPC and Strategic Engineering. This is the first investment from the SME-specific IIG Fund, a press release issued here today stated. Frontline Strategy is a Fabiani family office-anchored asset management company with prime focus on private equity investments. The company's Managing Partner Atim Kabra, said that “the investment in Shriram SEPL Composites is a continuation of Frontline Strategy's focus on investing in companies with global scope and capability.” […]

Ibibo will sell 50% to Tencent Holdings

The subsidiary of Cape Town, South Africa-based multinational media firm Naspers Ltd, MIH India Global Internet, which owns social networking site, will sell up to 50% stake in five years to China’s Tencent Holding Ltd Inc., an instant messaging service provider owned 36.1% by Naspers. Tencent has already put in $7.5 million (Rs32.10 crore) for an undisclosed stake in ibibo Web Pvt. Ltd, the company that manages three India-based websites—, and “This partnership allows us to benefit from Tencent’s expertise in providing Internet and mobile value-added services, as well as online advertising services,” said Ashish Kashyap, chief executive officer at ibibo Web. Naspers has invested 103 million rand (Rs55 crore) in India “to develop the greenfields social network services and local search operation, ibibo”, according to information on its website. Besides ibibo, Naspers’ interests in India include a 30% stake in ACL Wireless Ltd, a mobile software developer. As part of the deal, Tencent, which owns QQ, an instant messaging and communication tool, will give access to its products and technologies. […]

Axis Bank picks up 2.5% in HCC's realty project

Axis Bank has picked up 2.5 per cent stake in the in Lavasa Corporation, a subsidiary of Hindustan Construction Company (HCC), engaged in the development of a township in Lavasa near Pune, for Rs 250 crore. The deal values Lavasa at Rs 10,000 crore. Lavasa has issued convertible preference shares and convertible debentures to Axis bank in the transaction. At present, HCC holds 29 per cent stake in the project, while 16 per cent stake is held by Avantha Group (LM Thapar Group) and Venkateshwara Hatcheries holds 13 per cent. After the conversion of shares and debentures over the next five years, the equity stake of current investors will go down accordingly. […]