February 2011
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Faering raises Rs 830 cr for first PE fund

Faering Capital, promoted by former Morgan Stanley executive Sameer Shroff and HDFC honcho Deepak Parekh’s son Aditya Parekh, has raised Rs 830 crore as the first closure of its fund — Faering Capital India Evolving Fund. It is aiming to raise Rs 1,000 crore. “We raised the fund completely from the domestic market and have no immediate plan for any off-shore fund. We are looking at about 10-12 deals through this fund and acquiring a significant minority stake,” Aditya Parekh told Business Standard. Faering plans to add eight people by the end of 2011 and three-fourth of them will join as associates and at the VP level. The possible investment areas include financial services, consumer and retail, telecommunication, technology and internet, media and entertainment, education, healthcare and business services. The fund would assign significant consideration to the investee company’s corporate governance record and the quality of its management team, said a company statement. Faering expects to commit Rs 35-80 crore equity per transaction. “Today, there are significant structural positives in the Indian economy — largely driven by favourable demographics, increasing urbanisation, a growing middle class and a young professional workforce,” it said. […]

PE, VC-backed companies grow faster

Private equity (PE) and venture capital (VC)-backed companies are growing faster compared to their non-private equity-backed peers as well as market indices like the Sensex, Nifty and CNX midcap. The PE or VC-backed firms fare better in terms of growth in sales, profitability, wages, exports and R&D investments as compared to their peers which are not PE or VC-backed, according to a new study by Venture Intelligence, a leading research firm focussed on private equity and M&A activity in India. Sales at publicly-listed PE-backed companies demonstrated a CAGR of 25% over the 10-year period 2000-2010, a significantly higher rate compared to 15.1% at non-PE-backed listed firms; 17.9% at Nifty Index companies; 19.2% at Sensex companies and 15.3% at CNX mid-cap companies. E-backed companies showed 31.5% growth in profit-after-tax, significantly higher than non-PE backed companies (22%), Nifty (23%), Sensex (21%) and CNX midcap (22%). […]

3i Infrastructure Eyes Second India Fund

3i infrastructure (3IN.LN)is in talks about raising its next India fund as it looks to capitalize on the growth in developing markets, according to a source close to the situation. The U.K.-listed alternative asset manager said in an interim results statement today covering the period from Oct. 1 to Feb. 2, that it was more than 70% invested on its $1.2 billion Indian fund after the purchase of a 16% stake in Indian company GVK Energy. Private equity firms typically begin raising their next fund when their previous vehicle is 75% invested and a source close to 3i said that fund-raising for its second Indian fund will begin in earnest during the first half of 2011. The source said: “They have been in early talks since before Christmas but things have really accelerated over the past few weeks.” A spokesperson for 3i confirmed that the fund is in preliminary discussions with its existing investors about a second Indian fund but refused to confirm a timeframe on fund-raising. […]