March 2010
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Few takers for new IPL teams

IPL effort to sell two new IPL teams in an auction with a base price of $225 million (about £148 million) fell embarrassingly flat. “The bids that were received were returned without being opened,” Modi said. He added little else in the way of explanation — an omission that will increase suspicions that the IPL has fallen short of the money-spinning bonanza its creator had promised investors. Enthusiasm is likely to have been tempered by the knowledge that a side bought in excess of $225 million is unlikely to make a profit soon. The other indicator of the IPL’s growing value came a month earlier, when the Royals sold a 12 per cent stake for about $15.4 million. The deal valued the franchise at a shade less than $130 million, nearly double the amount paid a year earlier to acquire it. The portion of TV revenues to be distributed among the teams is due to fall to 70 per cent this year, from 80 per cent — the Board of Control for Cricket in India (BCCI), the owner of the IPL, will keep the rest — and in 2011, it will be 60 per cent. Under such a scenario it appears unlikely that any franchise sold in excess of $225 million would turn a profit in the near future and with each franchise licensed for a mere ten years, time is of the essence. […]

Axis Bank moves to spin off PE arm

Private sector Axis Bank had initiated talks with investors to spin off its private equity (PE) business as a separate entity, the lender said on Monday. The move was part of the lender’s restructuring plan, said a senior official of the bank. The lender’s PE venture, Axis Private Equity, has a fund size of $150 million. Shikha Sharma, managing director and chief executive officer of Axis Bank, on the sidelines of the MMA Women Managers' Convention 2010 held at Chennai on Monday, said, “We have initiated a dialogue with our investors and the process would take a few weeks and this would be part of our restructuring plan.” She refused to give a time frame for the plan. “We will first get investors’ approval and then decide,” she said. […]

Zee set to buy 9X in novel deal

Zee Entertainment Enterprises Ltd (ZEEL), India’s largest media company, is set to acquire 9X, the Hindi general entertainment channel belonging to the loss-making INX Media Pvt Ltd. The deal is expected to cost Zee about Rs 65 crore, sources familiar with the development said. Zee is understood to have walked the road with the INX management, currently being steered by media veteran Pradeep Guha — a former CEO of the Zee group who assumed INX’s chief executive position recently — over the past three-four months. Guha, who also has a small equity position in INX Media, was entrusted with the recast plan by INX’s private equity investors Temasek Holdings, New Silk Route, New Vernon Private Equity Fund and Kotak Private Equity.The decision to exit 9X seems to be an outcome of this recast plan as the channel wasn’t able to hold its own in an arena of white-hot competition. INX has racked up huge losses that, on a carryforward basis, are expected to touch over Rs 800 crore by the end of the current fiscal year for its entire media business. […]

Government Proposes to Cut Stake in SBI to 51%

The Indian government Monday moved a bill in Parliament to cut its minimum holding in the State Bank of India to 51% to allow the state-run lender to raise more capital from the market. Under existing law, government holding in the bank can't fall below 55%. As of December last year, the government's holding stood at 59.41%. The proposed changes in the State Bank of India Act will allow the country's largest lender by assets to issue preference shares. It will also enable the bank to issue bonus shares or privately place shares. […]

India Inc's Feb M&A deal tally jumps 5-fold at $1.3 bn

Corporate India's shopping spree continued unabated in the second month of this year, as deals worth over USD 1.3 billion were announced, a five-fold jump from the year-ago period, a report by global consultancy firm Grant Thornton said. Driven by the significant momentum in the merger and acquisition (M&A) space in February 2010, the total deal tally in the first two months of this year has risen to nearly USD 4 billion. “M&A and private equity deal activity has kept up with the significant momentum set from the beginning of 2010.” Grant Thornton Partner Specialist Advisory Services C G Srividya said. […]

Daimler Said to Be Selling Tata Stake Valued at $428 Million

Daimler AG, the world’s second- largest maker of luxury cars, is selling its stake in Tata Motors Ltd. after more than five decades of ownership, according to a person familiar with the matter. An investor is offering as many as 25.6 million shares, or a 5.3 percent holding, in India’s largest truck and bus maker, for 737.4 rupees to 761.3 rupees apiece in a block deal that is to be completed tomorrow, according to a sale document. The transaction could raise as much as 19.5 billion rupees ($428 million). Citigroup Inc. is managing the sale. Daimler, based in Stuttgart, Germany, formed a partnership with Tata Motors in 1954 to make commercial vehicles. Mumbai- based Tata Motors, stock has increased more than six times since a record closing low of 126.20 rupees in November 2008. In the 12 months ended March 2009, Tata Motors had its first loss in at least seven years. […]

SUUTI sells 9.42 per cent stake in NSDL to NSE news

ICICI Securities Ltd today said that the Specified Undertaking of The Unit Trust of India (SUUTI) has sold 9.42 per cent of its 25 per cent equity stake in National Securities Depository Limited (NSDL) to The National Stock Exchange (NSE). I-Sec acted as the sole advisor to SUUTI for the transaction. With the stake sale, NSE's shareholding in NSDL has gone up from 15.63 per cent to 25.05 per cent. ICICI Securities said SUUTI does not propose to sell further equity stake in NSDL to NSE. IDBI continues to be the largest sponsor of NSDL with 30 per cent equity stake. […]