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Solo ride for Hero

The long-speculated parting of ways between the Indian Hero group and Japanese Honda Motor Co. was made official this week, though key financial details of the deal remained elusive for investors. The initial announcement did, however have a few positive implications for them. One, it clarified that it was the Indian promoters, and not a clutch of PE firms, that were to buy out Honda's 26 per cent equity stake in the bike maker. This means that investors need not worry about a “floating” population of institutional investors picking up sizeable stakes in their company and threatening to offload it from time to time! Two, the announcement that royalty would be on current lines, or even lower, allays market fears that the Indian company would be forced to shell out out-sized royalty payments over the next few years. Besides, Hero can use Honda technology and brands until 2014. […]

Natixis to buy 25 pct in India's IDFC fund arm

h bank Natixis will buy 25 percent stake in the asset management arm of India's Infrastructure Development Finance Company, they said in a joint statement on Friday. Financial details of the deal were not disclosed. IDFC said the Natixis tie-up would give its asset management arm the opportunity to boost international distribution and gain access to overseas investors who were looking to invest in the Indian equity markets. […]

Andhra govt thinking will choke MFIs, say PEs

Private equity (PE) investors are alarmed by the Andhra Pradesh government’s move to bar micro finance institutions (MFIs) from tapping the capital market and PE investments. They have said this was regressive thinking and would stifle such lending. The AP government recommended to the Malegam committee on the subject, set up the Reserve Bank of India, that MFIs be barred from making Initial Public Offers of stock. They would then, said the government, focus on profits and defeat the purpose of microfinance. Following the news, SKS Microfinance’s share price fell by nine per cent on the Bombay Stock Exchange. It is the only listed MFI in the country. Other large MFIs like Spandana Sphoorty and Share Microfinance were looking to list on the bourses. Experts say they’d now defer their plans. AP forms a large proportion of MFI lending in the country. […]

GVK Energy Ltd raises 698 Cr from Actis and Government of Singapore

GVK Energy Ltd, a subsidiary of GVK Power & Infrastructure Limited has raised another Rs.698 Cr from Actis and Government of Singapore Investment Corporation (GIC), after raising Rs.800 Cr from 3i last month. With this deal, the total PE investment in GVK Energy has now gone up to Rs.1,498 Cr for an overall dilution of 24.97% stake. Both PE firms will invest Rs 349 crore each, of which Rs.218 Cr each will be invested as the first tranche of the deal. GVK Energy which currently has a power generation capacity of 901 Mw plans to use the proceeds to expand capacity up to 4,500 MW by 2013-14. GVK Group consolidated its power business under GVK Energy Ltd earlier this year, transferring its investment in GVK Industries Ltd, GVK Gautami Power Ltd, GVK Power (Goindwal Sahib) Ltd and Alaknanda Hydro Power Company Ltd. […]