February 2010
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Fidelity offloads 2% stake in MCX to Passport India

Leading foreign institutional investor Fidelity International is said to have sold around 2% stake in MCX to Passport India, an existing shareholder in the commodity bourse, according to market sources. The sale is in keeping with government norms that restrict a single foreign investor’s shareholding in a commodity bourse to 5% by March 31, 2010. With this, Fidelity’s stake will come down to 7% while Passport India’s shareholding in MCX will rise to 5%. No confirmation was available on the pricing of the transaction. Fidelity had picked up around 9% in MCX in 2006 for $49 million, valuing the exchange at around $540 million. When NYSE picked up a 5% stake in MCX in 2008, the exchange was valued at $1.1 billion. When contacted, officials from MCX and Fidelity declined to confirm the development. […]

Bharti plans stake sale to repay loans for Zain deal

Bharti Airtel on Thursday held out the possibility of issuing fresh shares or divesting its holding in telecom infrastructurecompanies to lighten the burden of debt it must assume to fund its planned acquisition of most of the African operations of Kuwait’s Zain Telecom. Top executives at India’s largest mobile phone firm told analysts in a conference call that the purchase would be funded by medium-term debt — loans with maturity period between 1 and 10 years — which will then be repaid with money generated from operations as well as a likely equity issuance. A final deal is expected to be clinched by end-April or mid-May. “If we close the deal with full debt, it will still be at a sensible level. But we are debt-averse and will use a combination of free cash flow and equity to repay debt. […]

More new generation private banks to come up

The country is likely to get several more new generation private banks with the finance minister announcing that RBI is considering new bank licenses to promoters in the private sector and also NBFCs if they meet RBI eligibility criteria. A host of Indian corporates likes Tatas, Birla group, and some of the older NBFCs have been interested in a banking licenses. Among finance companies, Reliance Capital and Indiabulls have announced their interest in getting into banking. Lenders such as Exim Bank and SIDBI were also interested in a banking licence. If such a move happens this would be the first time post 2002 that RBI would look at such a move. […]

Govt offers 10 pc stake in IOC refinery to Saudi Aramco

The government has offered a 10-per cent stake in the upcoming Paradip refinery of state-run Indian Oil Corp to Saudi Aramco for about $650 million, a government official told reporters on Thursday. The official, who did not wish to be a named, said Indian firms currently buy 25 million tonnes of crude oil annually from Saudi Aramco. “Historically, the Saudis have been interested in investing in refineries and distribution, but distribution at the moment in India is not viable (due to government-regulated fuel prices),” he said. India has recently sent a proposal offering stake in IOC's 300,000 barrels-per-day (bpd) coastal refinery in eastern India and the discussions would continue during Prime Minister Manmohan Singh's visit to Saudi Arabia from February 27, the official said. […]

PremjiInvest to pick Rs200-crore stake in Manipal Universal Learning news

Manipal Universal Learning, the corporate education arm of the education-cum-healthcare Manipal Group, said on Tuesday it had raised Rs200-crore ($43.3 million) in private equity investment from PremjiInvest. PremjiInvest is a $1-billion fund promoted by Wipro Group chairman Azim Premji. According to Manipal Universal CEO Anand Sudarshan PremjiInvest, together with several other PE investors in Manipal Universal-Capital International and IDFC Private Equity would hold a hold a significant minority stake in the firm. The firm had received substantial investments to the tune of $40 million and $30 million from Capital International and IDFC around three years ago. Sudarshan said the funds would go towards building a new campus in Dubai, expansion of the Antigua campus, the dental stream in Malaysia and upgradation of technology for next-generation virtual and distance-learning education system, EduNxt for which capital outlays of around $82-$90 million would be required. […]

Venture capital industry looks for tax sops, reforms

The venture capital industry has demanded tax concessions for specific sectors and better clarity on some specific policies governing the VC industry in the upcoming Budget to help boost “innovative” firms in India. “As we approach the Union Budget for 2010, we urge the ministry to clarify or improvise some specific policies governing the VC industry,” said Mr Harshal Shah, CEO, Reliance Venture Asset Management. Mr Shah further said that the current Foreign Ventur e Capital Investor guideline is unclear about investing in sectors beyond a few shortlisted ones namely biotechnology, nanotechnology, IT hardware and software, research and development for new chemical entities, seed research, dairy, poultry, bio-fuels and large hotel-cum-convention centres. […]

Religare to Invest Up to $1 Billion in Asset Managers

Religare Enterprises Ltd., the Indian financial services company owned by billionaire Malvinder Singh, said it may invest as much as $1 billion buying stakes in asset management companies worldwide. Religare agreed to buy a majority stake in Northgate Capital LLC, a private equity and venture capital firm that manages about $3 billion in assets and has offices in San Francisco and London, the New Delhi-based company said in a statement distributed by PRNewswire. Religare, controlled by the former owners of Ranbaxy Laboratories Ltd., set up its own mutual fund business in 2008 and bought Hichens, Harrison & Co., London’s oldest firm of stockbrokers, in the same year. The money manager has said it plans to open 100 branches in the first three years of operation. […]

Baring may acquire 15% in Famy Care

Baring Private Equity Partners (India) is the front-runner to buy about 15% stake in Mumbai-based drugmaker Famy Care for around $40 million, or Rs 185 crore, a person familiar with the matter said. Privately-held Famy Care is one of the world’s largest maker of oral contraceptives pills. “If the talks fructify, the deal could be closed within a month or two,” the person, a pharma industry executive asking not to be named, said. The deal will value Famy Care at Rs 1,230 crore, making it one of the biggest private equity investments in the pharma sector in recent times. When contacted by ET, Sanjeev Taparia, MD at Famy Care, said: “We are in discussions with potential PE funds. But we can’t share names as nothing has been finalised.” He also declined to share the financial details about the company. Mr Taparia leads the company owned by Taparia family. […]

Shree Renuka buys Brazilian sugar company for Rs 1,530 cr

India Inc has made a significant foray into Brazil, the largest sugar producer in the world. Shree Renuka Sugars Limited (SRSL) has entered into a definitive agreement with Grupo Equipav of Brazil for an investment of USD 329 million (around Rs 1,530 crore) leading to a majority, controlling equity stake in Equipav S.A. ACUCAR, one of the largest sugar/ethanol companies in that country. The company consists of two very large and modern sugar/ethanol mills with integrated co-generation facilities in Sao Paulo state in Southeast Brazil having a combined cane crushing capacity of 10.5 million tons of cane per annum (44,400tcd). In addition, Equipav has a co-generation capacity of 203 MW. The mills will be expanded to a combined capacity of 12.0 million tonnes (56,600 tcd) per annum and 295 MW with a capital expenditure of $218 million. […]

NMDC to pay $2.5 bn for 50% stake in Ferrous' Brazil ops

State-owned NMDC is set to pick up 50% stake in the Ferrous Resources Ltd’s Brazilian operations for $2.5 billion, marking the first overseas foray by India’s largest mining company. NMDC has signed the non-disclosure agreement with the Ferrous group, a multinational consolidator of iron ore with properties in several countries, such as the US, Brazil and Canada, said two senior executives familiar with the development. Under the proposed deal, the Ferrous group will issue fresh shares worth $2.5 billion to NMDC over the next few years. The funds will be used for developing mines and building infrastructure, said a senior executive who was part of the negotiations. […]