November 2010
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Gammon India acquires 84.16% Metropolitan Infrahousing stake

Engineering and construction firm Gammon India today said it has successfully acquired an 84.16 per cent stake in Metropolitan Infrahousing Private Ltd. Consequently, Metropolitan Infrahousing is now a subsidiary of Gammon India, the company said in a filing to the Bombay Stock Exchange. The company, however, did not disclose the price at which it acquired the Metropolitan Infrahousing shares. Recently, the company received a Rs310 crore order for supply of steam turbines and boilers for the Nagai power plant. […]

ChrysCapital acquires 12% stake in Pratibha for `100 crore

ChrysCapital Investment Advisors has bought a 12% stake for Rs.100 crore in Pratibha Industries Ltd, a Mumbai-listed infrastructure firm that lays water pipelines, builds roads and develops real estate. “We don’t comment on the specific strategy behind the investment, but all I can say is that we are quite positive on the company and hence recommended this deal to our investors,” said co-founder and senior managing director Ashish Dhawan of ChrysCapital, an Indian private equity (PE) fund which manages $2 billion (around Rs.9,000 crore). The fund invested in Pratibha through Van Dyck, a subsidiary of ChrysCapital V Llc, which values the 28-year-old firm at Rs.833 crore. ChrysCapital invested Rs.50 crore in an issue to qualified institutional investors, Rs.35 crore to buy preferential shares and Rs.15 crore in compulsorily convertible participatory preferential shares. […]

ICICI Venture in talks with Japanese firms for infra fund

Investors drawn to emerging markets but fund-raising gets more competitive. In the changed scenario of Indian private equity, where institutions and individuals are busy with fund raising, the fund houses are exploring untapped markets. ICICI Venture (I-Ven), India’s largest PE firm, is in talks with a couple of Japanese investors such as major banks and insurance firms to raise money for its infrastructure fund, say sources. The names of the Japanese majors could not be ascertained. I-Ven’s infra fund, aiming at a $750-million (Rs 3,425 crore) corpus, was launched this year. Though Indian GPs (General Partners or fund managers) are busy with raising funds from traditional markets such as the US and Europe, it is rare for them to explore markets such as Japan. According to industry experts, total pension assets in Japan for 2009 were $3 trillion. Japanese institutions invested close to $20 billion in private equity funds in 2009. […]

What due diligence is carried out by high profile investors?

Private equity firms and foreign institutional investors attract a lot of admiration. Of late, several big boys from the institutional world have suffered heavy losses in their multi-million dollar investments.But what still remains a mystery in this saga is how Money Matters Finserv, with questionable pedigree, managed to attract a stupendous Rs445 crore from renowned institutional investors, just one month before its chairman, Rajesh Sharma, was under CBI investigation for brokering deals through political connections. Four FIIs-Morgan Stanley, Wellington, Fidelity and GMO-put in as much as 60% of the funds into the firm through a qualified institutional placement (QIP) in late October. Two years ago, New Silk's investment in high-profile 9X media group crashed and burned. The most recent instances are the exits of Warburg Pincus and ChrysCapital from auto components manufacturer Amtek India.Another PE firm, Citigroup Venture Capital International (CVCI), carved out an 11% loss when it cashed almost 7% of its 10.44% stake in Jindal Drilling recently. However, Warburg Pincus also made a terrible bet on Moser Baer. This was one stock about which the market was always sceptical. Its accounting was seen as unreliable, especially since CDs (compact discs) were hardly a high-margin business. Very few FIIs seriously bought this stock. Warburg Pincus was alone in keeping the faith for a very long time, which turned out to be misplaced. […]

IL&FS Milestone, Morgan Stanley in fray for buying Kotak asset

IL&FS Milestone Realty Advisors Pvt. Ltd and Morgan Stanley are among those looking to buy a Rs.550 crore commercial asset of Kotak Realty Funds Group (KRFG) in suburban Mumbai, said two people familiar with the development. KRFG, the private equity fund of Kotak Mahindra Bank Ltd, bought the multi-tenanted, Goregaon office building in 2006 for Rs.200 crore from K Raheja Constructions, and is now planning a complete exit by selling it off to a single investor. The fund will evaluate offers made by IL&FS Milestone and Morgan Stanley and the deal is expected to close by December, said one of the persons mentioned above. “This has been a phenomenal investment for Kotak with an internal rate of return (IRR) in excess of 40% and (the asset) is a marquee property with stable rentals,” he said. […]

India Venture Partnership to invest up to INR 100 million in YKROK SERIES A INVESTMENT

India Venture Partnership (IVP), a leading early stage venture capital firm, today announced an investment of INR 100 million in Your Kids ‘R’ Our Kids® (YKROK) Education Private Limited. YKROK is a day care and education centre that offers a truly premium experience in early learning and care. With a capacity of serving more than 2,000 children in India across 12 centres today, and a growth strategy to create a network of 65 centres in the next three years serving more than 10,000 children in 10 cities across India. The new infusion of funds will fuel YKROK’s pan- India expansion plans. With a strong vision to deliver quality services and education, YKROK curriculum is on par with international standards as that of enhancing the child’s English language development, cognitive development in math and science and socio-emotional development. Focussing on delivering quality child care services and education, all the YKROK centres follow stringent Standard Operating procedures with world class methods & techniques of educational childcare. YKROK centres are in the process of getting certified and awarded with a gold seal by leading American Training Institute Teaching Strategies. […]

Security services sector sees M&As worth $400 mn in 2 yrs

Demand for private security services is growing, helping the business attract interest from private equity (PE) firms and foreign investors, in the wake of terror attacks in big cities. The sector has seen mergers and acquisitions (M&As) worth $400 million (Rs.1,812 crore) over the past two years, according to global consultancy firm Grant Thornton India. In August, Goldman Sachsowned Danish facility management firm International Service System A/S (ISS) acquired Chennai-based SDP Cisco for Rs. 200 crore, according to VCCircle, a trade publisher. Last year, G4S Plc, the largest security services provider in India by revenue, acquired Eureka Forbes Ltd project security systems arm for an undisclosed amount. Indian business TOPS Security Services Ltd, or Topsgrup, acquired the UK,s The Shield Guarding Co Ltd for $31.25 million in 2008. PE firm ICICI Venture Funds Management Ltd invested $26.74 million in Topsgrup in 2007, Standard Chartered Private Equity Ltd invested $33 million in Firepro Systems Pvt Ltd in late 2009, and DE Shaw group picked up a 14% stake in Security and Intelligence Services (India) Ltd, or SIS, in 2008. […]

TCIL to sell 30 per cent stake in Bharti Hexacom

The government has decided to sell 30 per cent stake held through Telecommunications Consultants of India Limited (TCIL) in Bharti Hexacom Ltd . Minister of State for Communications and IT Sachin Pilot today informed the Lok Sabha that the government has approved in principle sale of the entire 30 per cent stake of TCIL in Bharti Hexacom. The sale should be at the right time to obtain the best price, he added. Bharti Airtel holds 70 per cent and TCIL holds the remaining 30 per cent in Bharti Hexacom. […]

High profile PE firms seen exiting

The stock markets are seeing another round of exits by high profile private equity investors in the last one week. The PE firms to exit stocks are Warburg Pincus, which sold over half its shareholding in Amtek India, and Citigroup Venture Capital International (CVCI) encashing 7 per cent out of its total stake of 10.44 per cent in Jindal Drilling. It is interesting to note that Warburg Pincus and CVCI booked losses and got out of their positions, while ChrysCapital's with its exit of Infosys reportedly made a killing of 129 per cent in profits. Strictly speaking, a loss booked by a PE firm need not result in an actual loss. It is a loss on paper only, said the head of a research house, on condition of anonymity. Many a time the acquisition price itself is over invoiced. On November 19, Stoneridge Investments, an account of Warburg Pincus International Llc, sold 38.02 lakh shares at an average price of Rs 64.8 in Amtek India, while CVCI sold 15.93 lakh shares of Jindal Drilling at a price in the range of Rs 565 and Rs 570. […]

SEBI asks Funds to keep off real estate exposure

According to analysts, real estate prices, across cities, have witnessed a significant appreciation in the recent past. In fact, prices in some regions have surpassed their highs of 2008. Real estate funding has also been picked up over the past 11 months. The period between January and August has seen private equity investors closing 25 real estate deals, totalling $990 million. Developers have raised Rs 1,109 crore by way of debt placements and Rs 2,225 crore by way of public issues.Capital market regulator the Securities and Exchange Board of India (SEBI) has told asset management companies (AMCs) to avoid exposure to real estate debt in certain schemes. According to fund officials, SEBI has directed asset management companies to mention a ‘negative sector list’ in their draft prospectus, and give an undertaking that they will not invest in sectors that appear in this list. […]