June 2011
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Blackstone to pick up stake in FINO

Private equity fund Blackstone is set to pick up around 20% equity in FINO, a tech company that bankers say has huge potential because of its success in providing last-mile connectivity to those untouched by financial services. The talks which are at an advanced stage value the company at around Rs 700 crore after an investment of about Rs 140 crore. FINO was promoted in 2006 by lenders like ICICI Bank, which acted as an incubator for the fledgling business. The company was initially know as Financial Information Network and Operations and was launched under the leadership of Nachiket Mor, then deputy managing director of ICICI Bank. Its founder CEO Manish Khera was originally a joint general manager with ICICI Bank and its present chairman Sandeep Bakhshi is MD of ICICI Prudential Life. Other shareholders include Corporation Bank, HSBC , ICICI Lombard, IFC, IFMR Trust, Indian Bank, Intel, LIC and Union Bank. […]

PE investments gain momentum amid weak capital market

Sluggish stock markets have helped increase private equity investments significantly in India as several companies that were looking to raise funds from public are now trading the PE route. “Sluggish stock markets have in a way helped the PE investment activity – a number of companies which had filed for IPOs or were looking to raise money on public markets are now actively looking to raise money from PE,” Ernst & Young Partner Private Equity Mayank Rastogi said. Overall, PE investments in India have been growing in the past few years. According to global consultancy firm Grant Thornton, over the past 6 years (2005-2011), they have touched USD 50 billion. In comparison, capital raised through Initial Public Offering ( IPO) in this period was USD 31 billion. Avinash Gupta Leader Financial Advisory, Deloitte in India said, “Whenever public markets go soft, PE has a good time because they have money. Besides, in India, corporate growth is driven on the basis of getting equity and possibly by leveraging it further. So they tap PE.” […]

Club deals dominate Indian PE space

Club deals, where a consortium of private equity investors get together for a deal to make money, are growing but with a difference. The big-ticket deals are giving way to more ‘growth stage’ transactions. An example of the former is the recent $1-billion investment in Bharti Infratel Ltd by a consortium of private equity investors — Temasek Holdings Pte Ltd, Goldman Sachs, The Investment Corp. of Dubai, Macquarie Group Ltd, Citigroup, AIF Capital and India Equity Partners. It was one of the largest PE investments in India. Such big transactions marked club deals earlier. However, 2011 has witnessed many more club deals under the $100-million (Rs 450 crore) category. Of the 222 deals worth $5.1 billion in 2011 so far, 63 deals worth almost $2.5 bn took place in a co-investment way. Interestingly, out of 63 deals, 53 were below $100 mn in size. […]

Group of local and foreign funds buys 5% in ING Vysya via QIP for Rs 300 crore

A group of local and foreign funds led by private equity funds ChrysCapital, Morgan Stanley and India Advantage Fund have spent about Rs 300 crore to buy more than 5% in ING Vysya Bank. The funds bought the stake through the private bank's Rs 513 crore qualified institutional placement (QIP) that closed recently. The investment comes at a time when fund-raising has significantly slowed down amid unfavourable market conditions and the funds spent despite the share quoting at a discount to offer price. According to QIP allotment details disclosed to the NSE, six funds, including Warhol, a ChrysCapital entity, Morgan Stanley, Aberdeen, Bajaj Allianz Life Insurance, India Advantage Fund and Kotak India Growth Fund together subscribed to more than half of the QIP portion. Warhol, Morgan Stanley, Aberdeen, and Bajaj Allianz Life Insurance raised their existing holdings, while India Advantage Fund bought fresh stake of 2.14% and Kotak India Growth Fund bought equity of 1.27%. […]

Navis Capital acquires stake in Classic Stripes for $100 million

Malaysia-based Navis Capital Partners has picked up a majority stake in automobile-decal and graphics-designer Classic Stripes (CSPL) for almost $100 million, said a person familiar with the development. Classic Stripes, a part of Astarc Group, is headquartered in Mumbai and has four manufacturing facilities in the country with a total production capacity of over 13 million automotive graphic-sets a year. […]

PEs chase suburban brands for broader India story

Pedigree American venture capitalist Sequoia Capital has bought $30 million stake in Indore-based Prakash Snacks, makers of Yellow Diamond brand potato chips, as large financial investors aggressively chase tier-II food and beverage brands appealing to India's broader consumption story. Sequoia, one of the most influential growth capital providers from silicon valley, is believed to have acquired a significant minority stake in Prakash Snacks, with reported turnover of Rs 250 crore and Rs 30 crore in net profit. The firm is also a supplier of private labels to the country's expanding organized retail industry. Sequoia Capital IndiaMD VT Bhardwaj confirmed the just-concluded $25-30 million investment in Prakash Snacks. Last year, private equity giant Carlyleinvested Rs 102 crore in the South-based Tirumala Milk Products, which started as a small town enterprise at Narasaraopet in Guntur district of Andhra Pradesh. […]

Canadian Co eyes 10% stake in Adani Power

Canadian major Ballard Power Systems —the global leader in proton exchange membrane (PEM) fuel cell technology—is eyeing up to 10% stake in Adani Power, an arm of the diversified Adani Group. The deal at current market price is valued close to $500 million. Adanis hold 73.5% in the company. The promoters of Adani Power have raised funds by pledging over 53% of the promoter shareholding in the firm. An industry source said the falling share price of the company may trigger the stake sale. The value of the Adani Power shares pledged is pegged at Rs 9,213 crore. Adani Power shares closed up at Rs 112 on Friday, which touched its all-time low of Rs 105.75 a day earlier. The stock had touched its 52-week high of Rs 144.55 in September 2010. […]

Ybrant Digital to buy stake in Web 3.0

Hyderabad-based digital marketing firm Ybrant Digital today said it plans to acquire a minority stake in Israel-based Web 3.0 that also operates in similar domain, for an undisclosed amount. “We have signed a letter of intent to acquire minority stake in Web 3.0 which specialises in mobile marketing…The due diligence is likely to take about two months,” Ybrant Digital Chairman and CEO Suresh Reddy told PTI without disclosing details such as the quantum of stake and valuation. If completed, this would be eighth acquisition for Ybrant in the last five years. “Ybrant has acquired 100% stake in seven digital marketing companies in the last five years. These are US-based MediaOne and Ad Dynamic, Serbian firm VoloMP, Israel's Oridion, Argentina's DreamAd, Australia-based Max Interactive and Internet search engine Lycos,” he said. […]

PE funds flow to smaller cities

Two recent private equity (PE) deals show how capital has begun flowing to companies in low-income states and smaller cities. In November 2010, Aureos Capital, a mid-market PE firm, invested $10 million (Rs.45.1 crore today) in Apollo BSR Hospital, based in Bhilai, Chhattisgarh. A month earlier, Fidelity Growth Partners invested $20 million in Shreem Electric Ltd, a power equipment and turnkey solutions provider in Sangli, Maharashtra. Aureos, with $1.3 billion under management globally, is looking to make similar investments in low-income states. Balaji Srinivas, managing director of Aureos India Advisors Pvt. Ltd, said: “We are looking for deals in places like Bihar and Orissa. Fifteen per cent of our investment in the new fund will go to such areas.” Chhattisgarh is the 17th largest Indian state by population and accounts for 1.6% of national gross domestic product. Aureos has plans to raise a new PE fund. […]

Vedanta takes 10% stake in Cairn India

Vedanta Resources Plc took another 10 per cent stake in Cairn Energy's Indian assets as part of an overhaul of a long-delayed deal which will cut the price tag by more than $600 million. As part of changes announced on Monday, the deal will complete in two tranches, with Vedanta buying an initial 10 per cent stake by July 11. This will add to shares bought through an open offer and from Malaysian group Petronas, lifting Vedanta's stake in Cairn India to 28.5 per cent, with Cairn remaining the majority shareholder. Vedanta, which will become a fully fledged diversified miner once it secures a slice of India's oil reserves, will acquire the remaining 30 per cent stake it has agreed to buy once it has necessary consents from India. Vedanta and Cairn said they had agreed to remove a non-compete provision and a related fee of 50 rupees per share, cutting the price tag for the total 40 per cent stake being sold to $6.02 billion from $6.65 billion. […]