February 2009
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Reliance Industries to merge Reliance Petroleum

The board of Reliance Industries (RIL) will meet on 2 March to consider merger of Reliance Petroleum (RPL) with itself. The merger will be effective retrospectively from 1 April 2001. The merger plan was announced after the close of trading hours. In separate but identical filings both Reliance Industries and Reliance Petroleum informed the stock exchanges of their boards' proposals for merger. The Reliance Industries scrip closed 1.97 per cent lower at Rs1,265.05, while Reliance Petroleum scrip dropped 1.23 per cent to Rs76.20. Reliance Industries holds 70.38 per cent stake in Reliance Petroleum, while Chevron holds another 5 per cent. The rest is held by financial institutions and the public. […]

PE grows wary of India opportunity, see deals slowing

The amount of private equity investments flowing into once-magnetic India could halve this year as funds face edgy investors, souring portfolios, slowing growth and vendors still reluctant to cut their prices. TPG managing director Puneet Bhatia says a good part of the PE investments in India over the last two years, as an extended bull run dramatically ended, were fundamentally flawed. “The sustainable private equity deal volumes in this market would be just about 50 percent of the last couple of years,” Bhatia said at a PE conference in Mumbai. India drew private equity investment of $10.7 billion in 2008, according to AVCJ Research, when the stock market fell by more than half. The stock market is down 7 percent in 2009. […]

Dish TV in stake sale talks with PE firms – official

Dish TV India Ltd is in talks with private equity firms for a stake sale, a top official said on Thursday. “The talks are on but I will not be able to declare anything for the next two months,” Managing Director Jawahar Goel told television channel NDTV Profit. The direct-to-home satellite services operator is also passing on the service tax cut to its consumers,”the 2 percent service tax we have passed on to the consumer.” Earlier this week the government reduced service tax by 200 basis points to 10 percent and trimmed the central excise duty to 8 percent to raise demand for Indian goods and services in an economy facing a slowdown.(Reuters) […]

Venture capitalists invest $13 bn in emerging firms in 2008

Venture capitalists invested over $ 13 billion in companies in emerging countries, including India and China, in 2008, much higher than their previous bets, even as global economic situation continued to deteriorate at a faster pace. Venture capitalists (VCs)continued to seek out investment opportunities outside the US in 2008, as they put more than 13.4 billion dollar to work in 1,416 deals for emerging countries including India, China and Israel last year, as per global data provider Dow Jones VentureSource. VCs, who invest in startups and small businesses, raised investments by nearly five per cent from over 12.8 billion dollar in 1,711 deals outside the US in 2007. […]

3i India picks minority stake in KPCL for $161 mn

Leading private equity player 3i Group today said it has acquired a minority stake in Krishnapatanam Port Company (KPCL) for $161 million. The investment has been done from the $1.2-billion 3i India infrastructure fund, which is managed by 3i’s global infrastructure investment team, a release said. The fund was formed with an aim to invest in major infrastructure projects in the country and has completed investments in three major projects including that of KPCL, it said. […]

PE firms exit realty deals on 'condition precedents'

Private equity (PE) firms are learnt to be pulling out of real estate deals, citing condition precedents (CPs), which are part of a deal document. CPs are conditions that are required to be satisfied post signing of a deal, without which the deal cannot close. Conditions include getting permission in a specified time period, timeline guarantees. An overseas PE firm based in Mumbai is trying to get out of a deal it had signed with a Delhi-based real estate developer in the third quarter of 2008. It is invoking the ‘no material adverse change’ clause, which is part of the CPs in the contract. “PE firms are looking at various exit options to get out of partly completed deals. In transactions where the promoters have agreed that they will cause the company to effect a buyback, funds are assessing the exercise of such a provision,” said Akil Hirani, managing partner at law firm Majmudar & Co. […]

IFC invests $15M in WaterHealth for filtration in rural India

Irvine, Calif.-based Waterhealth International is planning to install water purification and disinfection systems for 600 communities across India, funded by a $15 million project finance round from International Finance Corp this week. IFC, a division of the World Bank, has previously invested equity in WaterHealth International to grow the business. But this new cash infusion will allow WaterHealth to quadruple the number of decentralized units up and running in Indian communities, said Tralance Addy, CEO of WaterHealth International. “India has 600,000 villages that would fall into this category where we would want to improve the water conditions,” Addy told the Cleantech Group today. “So 600 is a drop in the bucket.” […]

Nine Rivers Capital invests $10m in engineering company

Nine Rivers Capital, a Mauritius-based private equity firm focused on India-centric opportunities, has invested INR500m ($10m) for a minority stake in Pranav Construction Systems, an Indian formwork engineering company. The funds will be used to set up a manufacturing facility that will see a capacity expansion of nearly 400 per cent, from 9,600 metric tons per annum to 45,600 metric tons per annum; to augment its long-term working capital needs to fuel future growth; and to create rental fleets for the Middle East markets, the firm said. Pranav’s products have been used by its customers in infrastructure projects in India and the Middle East, such as the Delhi Metro, the Mumbai Metro, the Dubai Metro and the New Doha International Airport. […]

DLF founders in unit stake sale talks – report

The founders of India's top-listed realty, DLF Ltd, are in talks with private equity funds such as Blackstone Group and Bahrain-based Taib Bank to sell a majority stake in an affiliate, the Economic Times said. The deal, if finalised, would fetch DLF Assets around $450-$500 million, the newspaper said on Wednesday, adding the private equity arm of JPMorgan was also in talks. A senior team from Taib Bank was in New Delhi last week holding talks with DLF Assets, the paper said, citing an unnamed person involved in the development. “The deal would see a consortium of PE firms investing in DLF Assets,” the paper quoted an investment banker close to the development as saying. […]

River Valley close to picking 75% stake in Amritjal Venture

Singapore-based River Valley Hydro Ventures is close to picking 75% stake in Secunderabad-based power firm Amritjal Venture for Rs 300 crore. River Valley Ventures is looking to invest in hydro power projects in India and other countries. The deal would value Amritjal Venture at Rs 400 crore. The proceeds of the stake sale will be invested by the Indian firm in setting up hydro power projects in Sikkim, said a person with direct knowledge of the transaction . As per the plan, Amritjal Venture is going to float three special purpose vehicles (SPVs)- Gati Infrastructure, Gati Infrastructure Bhasmey Power and Gati Infrastructure Sada-Mangder Power. These SPVs will inturn set up the proposed power projects. […]