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Private equity (PE) firms operating in India are plugging energy as the next sunshine industry for investors. And the number of investments made in the sector so far this year seems to bear them out. In the last six months, private equity and venture capital firms have invested $890 million, or Rs3,818 crore, in 14 big and small energy deals, compared with four transactions worth $123 million a year earlier, according to local private equity tracker Venture Intelligence. Reason? In a power-starved nation that is getting more prosperous, energy presents a business opportunity that can be readily scaled up. “PE players look out for scalable businesses and enormous growth prospects. The energy sector in India provides potential for both, as the supply and demand gap is huge,” says Raja Kumar, founder, chief executive and managing director of UTI Ventures. UTI Ventures has invested in half-a-dozen energy or related companies, including Ind- Barath Power Infra Pvt. Ltd and Pesco Beam Environmental Solutions Pvt. Ltd. Apart from project-specific risks, experts say energy-business revenue, particularly in the power sector, can easily be predicted for as long as 10 years. Power requirements aren’t prone to fundamental shifts, they reason. […]
The man who revolutionised aviation in India with his low-cost airline, Air Deccan, is set for a new beginning in the cargo and logistics space. Capt G R Gopinath is planning to raise $50 million through private equity to part-fund his $200 million cargo venture. Confirming the move, Gopinath told TOI that Mumbai-based investment banking firm Edelweiss Capital has been asked to seek investors. Gopinath owns 100% of the company, Deccan Cargo, which he plans to build as “an end-to end express logistics service provider delivering cargo to one's door step”. The business will include ground logistic services via road and rail similar to that of global giants FedEx and UPS. Earlier he had told TOI that he would also look at selling his stake in Deccan Aviation to fund the cargo business. Gopinath holds a little over 8% stake in Deccan Aviation, which after the merger with Vijay Mallya owned UB Group's Kingfisher Airlines would be called Kingfisher Airlines. […]
ONGC group, India's top oil & gas exploration firm, may have set off on a new oil chase. And this time the target seems to be Imperial Energy Corporation, a $20-million British company with oil-producing assets in the Tomsk region of western Siberia of Russia and north-central Kazakhstan. The LSE-listed oil and gas exploration and production company currently produces 10,000 barrels per day of oil. A source said ONGC is in talks with Imperial Energy to form an “alliance”, which could include the former buying an equity interest in the latter. A board member of ONGC Videsh, ONGC's foreign investment arm, said the company doesn't comment on market speculation. John Hamilton, Imperial Energy finance director, did not respond to emails and phone calls from TOI. Imperial Energy's stock on Friday closed at £ 772 on LSE. With skyrocketing global crude prices, oil companies' valuations have touched new highs and acquisition battles have got tougher. From $101 a barrel on April 1, oil prices crossed the $147-a-barrel mark on July 11. Imperial Energy has a market capitalization of £789.31 million. […]
South African telco MTN is learnt to have sent feelers to Bharti for reviving talks, if it fails to clinch a deal with Reliance Communications, according to a source linked with discussions between the two companies. MTN and Bharti Airtel, which were in merger talks in May, but the Indian telco had called off talks after both companies failed to agree on the corporate structure of the combined entity. The source close to deliberations between Bharti and MTN also added that “the Indian telco was very open to take the discussions with MTN forward if such possibilities existed.” When contacted, the Bharti spokesperson said the “company does not comment on market speculation.” Last week, MTN and India’s second-largest mobile operator Reliance Communications (RCOM) agreed to “extend their period of exclusivity for talks until July 21.” Therefore, a formal approach by MTN appears unlikely for the time being. […]
Venture Capital firms invested $158 million in over 26 deals in the country during the three months ending June 2008, according to a study by Venture Intelligence. The study done in partnership with the US-India Venture Capital Association reveals that during the first six months of 2008 investments of $340 million across 51 investments were completed. “VC investment activity as well as amounts invested during the first half of 2008 has not been affected much by the turmoil in the global financial markets,” said Arun Natarajan, CEO of Venture Intelligence. “While IT companies continue to account for a majority of investments, it is quite significant that the proportion of non-IT investments – both by activity and value – has now climbed up to 40%. VC investments are increasingly focusing on alternative energy, media, retail and other consumer demand-led sectors,” Natarajan added. […]
SpiceJet on Tuesday said the private equity firm led by billionaire Wilbur Ross will invest $80 million (about Rs 345 crore) in the low cost airline. The board of directors of SpiceJet has accepted an offer in-principle from the US-based PE firm that would make available about Rs 345 crore to SpiceJet, a joint statement issued by SpiceJet and WL Ross & Co said. “We are delighted to have WL Ross as an investor in SpiceJet. WL Ross is one of the largest and the most experienced investor in the world. With this investment, we have no doubt that SpiceJet will fulfill its promise of emerging as India's leading airline,” SpiceJet board member Bhulo Kansagra said. “We believe in the long term validity of the low cost airline model in India and that fuel prices eventually will stabilise,” Chairman & CEO, WL Ross & Co LLC Wilbur L Ross said. […]
Amid apprehensions of economic slowdown, India Inc. seems to have resorted to mergers & acquisitions to keep their business going. The number of M&A deals announced in June stands at 51 with value at $5.35 billion, as against 49 deals and $2.92 billion in May, reveals Dealtracker, a monthly report by Grant Thornton. According to the report, the most significant deal was Japan’s Daiichi Sankyo Co. acquiring 34.8 per cent stake in Ranbaxy Laboratories Ltd. for $2.40 billion. This is followed by GMR Infrastructure Ltd ’s acquisition of 50 per cent stake in Netherlands based InterGen NV for $1.10 billion. There were 20 domestic deals (both acquirer and target company being Indian) with an announced value of $1.01 billion and 31 cross-border deals with an announced value of $4.33 billion. Nineteen of the cross border deals were outbound, where Indian companies acquired business outside the country and valued at $1.90 billion. Twelve were inbound deals where international companies or their subsidiaries bought Indian business with an announced value of $2.44 billion. […]
The $29-billion Tata Group is in the process of making a major private equity push through its flagship financial services company, Tata Capital Ltd (TCL). The plans being drawn up relate to setting up PE funds aimed at mid-cap, technology and healthcare sectors. TCL managing director & CEO Praveen P Kadle told FE: “The plans are currently on the drawing board stage, and we hope to unveil it around September. We are looking at areas like the mid-cap space and technology firms.” TCL sources said each fund would be to the tune of $200-300 million, and would aim at getting investors also from the non-resident Indian community. The PE plan is part of a broader financial services game plan being put in place by the Tata Group under the Tata Capital umbrella. “We plan to leverage the strength and contacts we have in several business sectors through our group companies,” said a source. In the technology segment, IT and communications would be focus areas, where the group has a significant presence. […]
Radio frequency systems and solutions company Microqual Techno is close to sealing private equity funding of $20 million by August-end for expansion, a top company official said. “This is the second round of PE funding for us and we plan to raise USD 20 million by August-end from 3-4 leading PE players,” Microqual Techno's CEO Mahesh Choudhary said here. In mid-2007, the company had raised USD 10 million from three players– NEA-IndoUS Ventures, JAFCO Asia and BTS India Fund. The three existing investors will participate in this round of funding as well, apart from a couple of new investors, Choudhary said. Post the fund-infusion, the PE investors will hold a 48 per cent stake in Microqual Techno. […]
IT major, Idhasoft, is close to sealing two acquisitions worth Rs 200 crore in the US, a top company official said. “We are hopeful of completing the first acquisition by end-August and the second by September 30,” Idhasoft's Chief Executive Officer, Alok Pathak, said here. While Pathak would not divulge the identities of the two target companies, he said that they were medium-sized ones with a strong customer-base. “Acquiring them would help us in augmenting our customer-base,” he said. While one company is in the B2C domain with Fortune 50 clients, the other is in the business intelligence, ERP and business process re-engineering space with several Fortune 100 clients. Idhasoft is a rapidly-growing IT services provider in retail banking, financial services, manufacturing, healthcare and insurance domains and its clients include leading Fortune 500 companies. […]
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