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The departing chairman of the Securities and Exchange Board of India (Sebi), C.B. Bhave, proposed changes in key areas related to the capital market, 10 days before the end of his three-year term. In a bid to bring in more transparency in deals between group companies, Sebi will propose that the ministry of corporate affairs tighten norms for all interested parties, including promoters, in such deals. The market regulator said it will recommend to the ministry the amendment of a clause of the Companies Bill, 2009, to prevent interested shareholders from voting on the special resolution of the prescribed related party transaction. The definition of interested party will cover the promoters of companies, Bhave said, while addressing the last board meeting of his tenure that ends on 17 February. The board discussed some of the issues that had arisen out of the earnings fraud at Satyam Computer Services Ltd. Investors won’t be allowed to vote on resolutions that involve a conflict of interest. “The issue arose when Maytas was proposed to be amalgamated with Satyam. Though the transaction did not materialize eventually, the matter originated from there,” said Bhave. […]
Private equity investment slowed down to $500 million in January over the previous month, says a report by Ernst & Young. Infrastructure companies, however, attracted a major chunk of the PE investment in January, which was lower by 9% over about $550 million in December last year, the report said. “There has been a marginal decline in the aggregate investments during the month compared to last month, but activity remains robust compared to January 2010,” E&Y Partner (Private Equity) Mayank Rastogi told PTI. The total PE investment in January 2010 was $380 million. However, the total number of deals announced during the month was higher than that in both the previous month and January 2010. In January this year, 28 PE deals were announced, against 26 deals in December and 16 in the same month last year. […]
Private equity (PE) firms are taking tax insurance on exits from investments in order to protect themselves from litigation, having been spooked by the recent travails that have beset acquisitions by HSBC and Vodafone. According to tax consulting firms such as KPMG, Deloitte Haskins and Sells and PricewaterhouseCoopers (PwC), and law firms that help PE firms structure the exits, funds are seeking such cover while negotiating the deals. However, they declined to disclose details of such transactions due to client confidentiality agreements. “Funds are actively looking to take some cover regarding uncertainties on the taxation aspect,” said Pranay Bhatia, associate partner at legal firm Economic Laws Practice (ELP). In the past one year, he has worked on at least five exits where such insurance cover was taken. “There is a lot of uncertainty regarding the Mauritius tax treaty protection in the (proposed) direct taxes code, so we want to protect ourselves from any tax exposure,” said a fund manager of a foreign PE fund that invests in India. He declined to be identified. […]
Marquee private equity names are in the reckoning for bigger investments in India's $50-billion healthcare industry. General Atlantic Partners (GAP) and Jardine Rothschild are among the funds that are likely to cut deals with a few emerging healthcare service providers in the coming weeks. General Atlantic, which is shaking off its technology and export focus in India, is holding discussions to buy $100 million, or Rs 450 crore, stake in DM Healthcare spearheaded by Dubai-based medical entrepreneur Dr Azad Moopen. Jardine Rothschild Asia Capital, a private equity joint venture between Jardines and the Rothschilds, is in the fray for $50 million, or around Rs 200 crore, investment in Hyderabad-based Quality Care, which operates a network of 12 hospital under the Care brand. These transactions are part of the ambitious growth capital raising by emerging healthcare networks. Care Hospital-in which the big bull Rakesh Jhunjhunwala and serial entrepreneur and Matrix Labs founder N Prasad are investors-plans to raise Rs 350 crore in equity and debt for doubling beds from 1,700 to 3,200. DM Healthcare is looking at over Rs 600 crore fund-raise to ramp up fast even through acquisitions. […]
Fundraising woes and changing investor preferences are diminishing the influence of private equity fund-of-funds managers. No longer can a fund-of-funds manager's decision whether to invest in a fund make or break that fund. In fact, some insiders estimate that 20% of current fund-of-funds managers might not survive because of fundraising problems. According to Preqin, an alternative investment research firm in London, funds of funds accounted for a mere $10.7 billion of the $225 billion raised worldwide by private equity funds in 2010, the lowest total since 2004. In 2009, funds of funds accounted for $27.4 billion. Private equity funds of funds returned 11.6% for the year ended June 30, according to Preqin. The overall private equity internal rate of return for the year ended June 30 was 19.18%.Industry professionals predict that many funds of funds will either merge, close or change investment strategies. […]
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%). […]
Venture capital (VC) firm Ojas Venture Partners has just invested in Bangalore-based online advertising solutions company Vizury Interactive. Chetan Kulkarni, CEO of Vizury Interactive, confirmed the development but declined to give details on the size of the deal and the fund deployment plans, for “competitive reasons”. Advertisers are increasingly relying on web analytics tools of online marketing companies to judge the relevance of a website publisher's keywords, traffic, content etc. Publishers rely on them for selling their inventory to the appropriate advertiser and for understanding the profile of website visitors. Several online marketing companies also act as networks or intermediaries between advertisers and publisher websites to match demand and supply for online ads. […]
“The wellness sector in India is attracting new players as well as private equity funding, and it is a natural progression considering the phenomenal growth across verticals in this space,” slimming and wellness chain VLCC Healthcare MD Sandeep Ahuja said. The Delhi-based company received investments from Indian as well as international investors and total private equity investments in the company currently are over $43 million. As per a report by FICCI-Ernst and Young in 2009, India's wellness market is expected to grow at about 30-35% year-on-year due to rising consumerism, globalisation and changing lifestyles. Rising disposable incomes, increasingly demanding and stressful work-place conditions and sedentary lifestyles are the growth drivers for the wellness industry. “The definition of wellness has changed from luxury to necessity as it is now a need for all ,” said Ahuja. Investors are sensing a big opportunity in the wellness sector where less than 5% of the market is being serviced by organised players. Investors can derive immense value from the sector which is catering to a far large target audience than just being a niche offering as was the case earlier,” Venture Intelligence MD Arun Natarajan said. […]
As rapid economic expansion creates a booming market for private security services, small and mid-sized companies in the sector are seeking risk capital infusion to further expansion plans. Growing public infrastructure in the form of roads, airports, shopping malls and commercial complexes has triggered a boom in the market for security services that is expected to grow five-fold to reach a size of 30,000 crore by 2015. Delhi-based Security and Intelligence Services (India) is looking to raise nearly $100 million and is in talks with a slew of private equity firms . “The security sector is characterised by high growth, stable cash flows and margins, low capital expenditure and high returns,” said Rituraj Sinha, group chief operating officer of the firm that raised capital in 2008 from DE Shaw & Co , a New York-based hedge fund to acquire the Australian arm of the guarding and mobile patrol business unit of United Technologies. Globally too, the security services sector has been red hot for private equity funds. Most major global funds, such as Blackstone, Carlyle, Dublier & Rice, have invested in security services space in the US, Europe and Japan over the last decade. In India, PE firm ICICI Venture Funds Management invested $26.74 million in Topsgrup in 2007, while Standard Chartered Private Equity invested $33 million in Firepro Systems in late 2009. […]
Private equity and venture capital firms invested a whopping $7,974 million in about 325 deals in India during 2010 calender year, according to data released by by PE/VC research firm Venture Intelligence. PE investments in 2010 almost double to $7.9 billion compared with $4,068 million across 290 deals in 2009. This data excludes deals in real estate. PE/VC exits were the most interesting sectoral trend in 2010 with 121 transactions, including 24 via IPOs. PE-backed companies raised about $2.20 billion via IPOs, while 2009 witnessed just 66 liquidity events, including seven via IPOs. The largest IPO by a PE-backed firm in the year was the $359 million SKS Microfinance IPO. Among exits via strategic sales, ChrysCapital’s reported $400 million sale of its holdings in Infosys Technologies (in which it had invested about $175 million in May 2008) was among the most significant exits via public market sales Actis and Sequoia Capital India exited OTC drug firm Paras Pharmaceuticals via sale to UK-based Reckitt Benckiser for $726 million. Actis had held a 63% stake in Paras. […]
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