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Reliance Venture Asset Management Pvt. Ltd co-invested $12 million (Rs54.72 crore) in biomass power-focused AllGreen Energy India Pvt. Ltd, ending a three-and-a-half-year search for an “investable” clean-tech firm. There are only a few quality companies in this space, said Harshal J. Shah, chief executive of Reliance Venture, the venture capital (VC) arm of the Reliance Group, formerly known as the Reliance-Anil Dhirubhai Ambani Group (R-Adag). “There are two kinds of deals in India in this space—a form of implementation play and smaller tech-innovation deals. It is an implementation versus innovation game here,” he said. “Most large PE deals are in the implementation side. VC’s focus is on innovation.” By implementation play, Shah refers to technologies or models companies adopt from others and implement locally, such as hydropower generation that need large capital. Clean-tech innovation is about companies designing a new technology to generate power in a cost-effective manner with minimum emissions. […]
As valuation of companies have improved with recovery in the stock market, a number of private equity (PE) players are offloading their stakes worldwide. These exit valuations have shot up nearly three-times in the year 2010 to USD 203 billion, according to a report. According to a research firm Preqin, 811 PE-backed exits occurred in 2010, with an aggregate exit transaction size of USD 203 billion. This is almost three times the aggregate exit value seen in 2009 at USD 73.6 billion. “End of year results suggest the private equity deals sector has recovered following the financial crisis, with both the value and volume of deals and exits returning to, or exceeding, pre-crisis levels,” the report noted. Market persons said years would be good for PE players in terms of offloading their holdings in companies. […]
Real estate developers in north India are again aggressively scouting for funds for the completion of residential projects announced much earlier. New Delhi-based realty firm Parsvnath Developers Ltd (PDL) has raised Rs.100 crore by selling 49.9% stake in a housing project at Ghaziabad to private equity (PE) firm SUN-Apollo India Real Estate Fund LLC. The 31-acre housing project “Parsvnath Exotica” is being developed by its subsidiary Parsvnath Buildwell Pvt. Ltd. In another development, Red Fort Capital Advisors Pvt. Ltd is close to investing Rs.150 crore in the “Esencia” township project in Gurgaon of Ansal Properties and Infrastructure Ltd. “While we may see a steady flow of PE transactions in real estate this year, many of them will be in projects that have garnered good amount of pre-sales and are already in the development mode,” said Adhidev Chattopadhyay, analyst, Edelweiss Securities Ltd. “Both these investments have been in the better projects of the developers, who both have large tracts of land.” […]
With the bullish market leading to new projects, realty funds are now in search of greener pastures. Availability of capital is one of the major constraints faced by property developers. While bank funding comes with strings attached, a number of private equity (PE) funds are eyeing the real estate market with the demand level picking up in many cities now. Most real estate investments across India are through PE funds, who prefer to invest at the entity or special purpose vehicle (SPV) level. Even a small player can access real estate funds for a longer tenure. Moreover, association with real estate funds provides credibility during IPOs. However, while domestic funds are catering to the demand of smaller projects closer to the city, FDI investment can only happen in the suburban and peripheral areas with the prescribed minimum threshold limit of 5 lakh sqft built up area. Industry sources estimates that there are 15 PE funds with a surplus of close to $300 million looking at potential investment of $5 billion in the domestic market. Though they prefer to invest in residential projects, some funds are keen on commercial and retail development projects, according to market sources. […]
Marking a robust year for deal activities, mergers and acquisitions (M&As) involving Indian companies trebled to USD 68.3 billion in 2010 as compared to the previous year, says global consultancy Ernst & Young . Easy availability of finance as well as better economic prospects saw Indian players involved in as many as 1,267 M&A deals last year. “For the year 2010, India's M&A deal value has reached a whopping USD 68.3 billion, having grown three-folds compared to the value recorded in 2009,” E&Y said today. India recorded 554 cross border deals worth USD 54.9 billion — accounting for an 80 per cent share of 2010 total deal value. The average deal size last year rose to USD 120 million — “an all time high and more than three times compared to the average deal size of last year (2009)”. E&Y 's Partner and National Director (Transaction Advisory Services) Ranjan Biswas in a statement said that 2010 has been a blockbuster year for Indian M&A deals. […]
Profits posted by listed companies backed by private equity (PE) firms grew at nearly double the pace of the broader market in 2010, but the performance of their stocks has been mixed, with over half of them underperforming the Nifty. A Mint analysis of earnings at 67 PE-backed listed companies shows that aggregate profits grew 46% in the 12 months to 30 September 2010 from the year-earlier period. Profits made by the 50 companies that make up the Nifty rose 11% in the same period, while BSE 500 companies saw a 26% growth. The BSE 500 accounts for 93% of the market capitalization on the Bombay Stock Exchange. As December quarter results have not been declared, earnings of the year to September were considered for the analysis. The list of PE-backed companies was provided by VCCEdge, a financial research platform. […]
The end of 2010 witnessed one among the largest exits in the Indian private equity sector, wherein PE majors Actis and Sequoia together made a cool $500-million profit through the sale of portfolio firm Paras Pharma. The beginning of 2011 is set to witness another big-ticket M&A deal, in which General Atlantic is to exit Patni Computers. The deal size could be around $1 billion. These two mega deals remain strong examples of M&A being today’s preferred after exit route for PE firms in India than the conventional IPO route. Siddharth Shah, head of corporate & securities practice at Nishith Desai Associates, said, “One needs to bear in mind that besides the high notional valuation that an IPO may create in some circumstances, the certainty of being able to exit on account of liquidity, price realisation and regulatory constraints may make a trade sale or a strategic sale or an M&A exit a more real and profitable exit. Time value of money is also paramount for PE investors, as most of them invest with a certain time-specific horizon.” […]
Sources indicate the finance ministry will hold consultations with the ministry of corporate affairs to discuss India Inc's reservations on the proposed changes in the takeover code. CNBC-TV18's Aakansha Sethi learns from sources in the government that the finance ministry is not in favour of the proposed 100% open offer. The 100% open offer was proposed by the C Achuthan panel. Finance Ministry believes the change in open offer size is not healthy for Indian companies. The Achuthan panel set up by the Securities and Exchange Board of India (SEBI) had proposed a hiking of that trigger for the open offer from 15% to 25% and had said that the open offer should be made for 100% of the equity. […]
From FMCG to the financial sector, an increasing number of veterans are joining private equity or venture capital firms. It's the new rush of adrenaline that's sweeping corporate boardrooms. As private equity players become bolder in India , they are cherry-picking the best talent to help them nurture new entrepreneurial stories and spot the next big investment theme. In the past six months, the flow of those leaving the comfort of their organisations to enter the private equity or venture capital space has gathered momentum. And the exodus has been across the board, from FMCG to financials. The examples of Wipro's former boss, Vivek Paul (he joined TPG then launched his own fund, Kinetic Glue), and Unilever's Vindi Banga (who moved to Clayton Dubilier & Rice) have clearly influenced the trend. […]
Capitalising on a market revival, the 2010 year saw Indian companies raising nearly Rs 59,000 crore (US$13 billion) from IPOs and the total mop-up from initial offerings is expected to touch Rs 90,000 crore in the coming year, says a study. According to a report by SMC Global Securities Limited, Indian companies, both public and private,have collected about Rs 59,523 crore from the primary market so far this year. In 2009 only 20 companies raised close to Rs 20,000 crore from initial public offers. The report added that the pipeline is indicating a total public issue volume of about Rs 90,000 crore during 2011. “…Rs 50,000 crore from private sector and Rs 40,000 crore from public sector,” SMC Global Securities Strategist & head of research Jagannadham Thunuguntla said. […]
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