June 2009
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Citi Hires Moltke to Govern Unit Sales : May sell HDFC stake

Citigroup may soon sell off part or all of its 11.73% stake in India's largest mortgage lender, HDFC Bank Ltd. , according to a report Monday in India's Economic Times. Citi's stake in the bank is currently worth 80 billion rupees ($1.7 billion), the report said. Citigroup has hired James von Moltke, a Morgan Stanley banker, to take charge of the sale of businesses the bank plans to exit. […]

PE funds have new favourites

A couple of years ago, private equity, or PE, players were spoilt for choice in terms of investing opportunities. Funds were flowing in and there was room for everyone, as evidenced by the frenetic pace of deals and the ever expanding competitive landscape, even in the face of increasing valuations. Today, in comparison, opportunities still exist, but discussions are subdued, tinged with a sense of caution. Transaction levels are low since the bid-ask spread continues to remain high. Education, with its opportunity for scalability, huge mismatch in supply and demand, and high returns is a current favourite. PE and venture capital, or VC, funds have already made at least 30 investments worth $300 million in education-related companies in the past 24 months. Some funds have been forward-looking and already have portfolios in these sectors. For example, PE players invested $250 million in microfinance in the last two years, most of which was focused on rural areas, which have been rather insulated from the downturn. […]

Cisco Considering $2 Billion Investment in Indian GIFT Project

Network equipment provider Cisco Systems is planning to invest $2 billion in the $16 billion Gujarat International Finance Tec-City, GIFT, project in Gujarat state of India, according to sources close to the deal. According to a state government release, Cisco's chief globalization officer and executive vice president Win Elfrink has already signed an MoU with the government for a project partnership. […]

TransUnion to buy 27.5% more in CIBIL

US-based consumer credit reporting agency TransUnion is close to buying a 27.51% stake in Credit Information Bureau India (CIBIL) from its existing shareholders including HDFC, ICICI and Indian Overseas Bank (IOB) for Rs 96.28 crore, a person with direct knowledge of the development said. TransUnion already owns around 20% in CIBIL and the stake purchase will hike its holding to 47.5%. The transaction will value CIBIL at Rs 350 crore. The person who is intermediating the deal added that TransUnion would be acquiring the stake from a clutch of CIBIL’s existing shareholders. It would acquire 5% each from HDFC, SBI, ICICI, Punjab National Bank and IOB, besides buying out 2.5% from GE Strategic Investments (GE) and 0.01% from Dun & Bradstreet Information Services (D&B). […]

VCFs will need $100k capital for India entry

The Securities and Exchange Board of India (Sebi) is considering a proposal, wherein foreign venture capital funds (VCFs) will need to have a minimum capitalisation of $100,000 to be eligible to invest in India. The rule is being framed in consultation with RBI, an official familiar with the development told ET. A foreign VCF looking to invest in India usually formed an investment holding firm in Mauritius with rudimentary capital, often not more than a few dollars. The investment company then filed for registration with Indian regulators, and once it got the approval, overseas investors were gradually roped in. Such a practice was followed because several foreign investors were uncomfortable in making commitments unless the offshore fund had obtained necessary approvals from the regulator. […]

SBI to float PE Fund with Sovereign entity of Oman

The State Bank of India, which earlier set up an infrastructure fund along with Australia's Macquaire and the International Finance Corporation (IFC), is now in the process of setting up a joint venture private equity fund in Oman. The bank is also in the process of building up an employee base for its future expansion programmes. SBI and Macquarie hold 45 per cent stake each in the infrastructure fund while IFC holds the remaining 10 per cent stake. The fund has projected a total capital, including contributions from domestic institutions, of $2-3 billion. […]