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With a staggering increase in capital invested across social ventures—$404.58 million in 2010 as compared to $150.36 million in 2009—private equity/ venture capital players are finding a fortune beyond the tip of the pyramid. And, in a turn of focus, interstitially more and more mainstream PE/VC funds are also venturing in this hitherto reserved space of social venture capital funds, making the investment play in the segment dynamic like never before. Fathom this: If social VC funds such as Acumen Fund, Gray Matters Capital and Omidyar Network, in tune with their goals, are investing in a lighting and power company D.light Design, which delivers affordable and quality solutions to serve families living without adequate electricity, it’s being matched up by investments made by mainstream players such as Draper Fisher Jurvetson India (DFJ), who are driven solely by commercial gains. So what is fuelling this growing interest in the social investing space by mainstream players? Draper Fisher Jurvetson India has made recent investments in environmental & facilities services firm Attero Recycling Pvt Ltd and D.light Design Pvt Ltd. […]
This enables firms to raise funds without diluting any stake at the parent level. Private equity (PE) funds are gearing up for a new set of opportunities in the road sector. Infrastructure companies are looking to raise equity by selling minor stakes at the project level, an opportunity PE players are chasing aggressively. Investment bankers which are trying to strike deals in the segment say a number of companies with highway projects are looking for investors. The projects involved are at various stages of development. Some assets are operational too, they say. “There’s a reasonable history in the sector and there are many assets in the project life cycle where development and construction risks are finished,” said Arvind Mahajan, executive director, KPMG. […]
StanChart PE to exit Powerica through an initial public offer. This year’s stable market has given private equity (PE) investors an opportunity to profitably exit their investments in India. Standard Chartered Private Equity Ltd (SCPEL), the PE arm of the global banking major, is set to exit its investment in Powerica, a Mumbai-based genset manufacturer, through the company’s proposed initial public offer (IPO). According to sources in the know, the genset maker plans to float an IPO in the range of Rs 800 crore and is likely to submit the draft red herring prospectus (DRHP) next month. It has mandated Kotak Mahindra Capital and Citi Group for the fund-raising and is also in talks with JM Financial for this. In 2007, SCPEL had invested about $50 million in Powerica and acquired about 10 per cent stake. It could not be acertained how much stake SCPEL would sell in the IPO. […]
Private equity firms and foreign institutional investors attract a lot of admiration. Of late, several big boys from the institutional world have suffered heavy losses in their multi-million dollar investments.But what still remains a mystery in this saga is how Money Matters Finserv, with questionable pedigree, managed to attract a stupendous Rs445 crore from renowned institutional investors, just one month before its chairman, Rajesh Sharma, was under CBI investigation for brokering deals through political connections. Four FIIs-Morgan Stanley, Wellington, Fidelity and GMO-put in as much as 60% of the funds into the firm through a qualified institutional placement (QIP) in late October. Two years ago, New Silk's investment in high-profile 9X media group crashed and burned. The most recent instances are the exits of Warburg Pincus and ChrysCapital from auto components manufacturer Amtek India.Another PE firm, Citigroup Venture Capital International (CVCI), carved out an 11% loss when it cashed almost 7% of its 10.44% stake in Jindal Drilling recently. However, Warburg Pincus also made a terrible bet on Moser Baer. This was one stock about which the market was always sceptical. Its accounting was seen as unreliable, especially since CDs (compact discs) were hardly a high-margin business. Very few FIIs seriously bought this stock. Warburg Pincus was alone in keeping the faith for a very long time, which turned out to be misplaced. […]
Demand for private security services is growing, helping the business attract interest from private equity (PE) firms and foreign investors, in the wake of terror attacks in big cities. The sector has seen mergers and acquisitions (M&As) worth $400 million (Rs.1,812 crore) over the past two years, according to global consultancy firm Grant Thornton India. In August, Goldman Sachsowned Danish facility management firm International Service System A/S (ISS) acquired Chennai-based SDP Cisco for Rs. 200 crore, according to VCCircle, a trade publisher. Last year, G4S Plc, the largest security services provider in India by revenue, acquired Eureka Forbes Ltd project security systems arm for an undisclosed amount. Indian business TOPS Security Services Ltd, or Topsgrup, acquired the UK,s The Shield Guarding Co Ltd for $31.25 million in 2008. PE firm ICICI Venture Funds Management Ltd invested $26.74 million in Topsgrup in 2007, Standard Chartered Private Equity Ltd invested $33 million in Firepro Systems Pvt Ltd in late 2009, and DE Shaw group picked up a 14% stake in Security and Intelligence Services (India) Ltd, or SIS, in 2008. […]
The stock markets are seeing another round of exits by high profile private equity investors in the last one week. The PE firms to exit stocks are Warburg Pincus, which sold over half its shareholding in Amtek India, and Citigroup Venture Capital International (CVCI) encashing 7 per cent out of its total stake of 10.44 per cent in Jindal Drilling. It is interesting to note that Warburg Pincus and CVCI booked losses and got out of their positions, while ChrysCapital's with its exit of Infosys reportedly made a killing of 129 per cent in profits. Strictly speaking, a loss booked by a PE firm need not result in an actual loss. It is a loss on paper only, said the head of a research house, on condition of anonymity. Many a time the acquisition price itself is over invoiced. On November 19, Stoneridge Investments, an account of Warburg Pincus International Llc, sold 38.02 lakh shares at an average price of Rs 64.8 in Amtek India, while CVCI sold 15.93 lakh shares of Jindal Drilling at a price in the range of Rs 565 and Rs 570. […]
According to analysts, real estate prices, across cities, have witnessed a significant appreciation in the recent past. In fact, prices in some regions have surpassed their highs of 2008. Real estate funding has also been picked up over the past 11 months. The period between January and August has seen private equity investors closing 25 real estate deals, totalling $990 million. Developers have raised Rs 1,109 crore by way of debt placements and Rs 2,225 crore by way of public issues.Capital market regulator the Securities and Exchange Board of India (SEBI) has told asset management companies (AMCs) to avoid exposure to real estate debt in certain schemes. According to fund officials, SEBI has directed asset management companies to mention a ‘negative sector list’ in their draft prospectus, and give an undertaking that they will not invest in sectors that appear in this list. […]
India Inc's shopping spree for October remained unabated with 46 merger and acquisition transactions (M&A) worth over $530 million taking place during the period and the year-to-date deal touching a whopping $42.76 billion in value terms. According to global consultancy firm Grant Thornton, there were 46 M&A deals worth $530 million in October 2010. So far this year India Inc has announced 546 M&A deals of $42,759 million — highest in last two years both in value and number terms. […]
Private equity investment in October dipped significantly by 27% to USD 326 million, the lowest monthly deal value over the last 14 months in the country. According to data compiled by research firm VCCedge, the total private equity investment was USD 447 million in October 2009. The momentum seen in private equity activity earlier this year seems to be on the downside, with September and October recording a steady decline from the heightened activity seen in the preceding four months of the year. The first 10 months of 2010 have seen private equity deal value at USD 7.57 billion as compared to USD 4.4 billion in the whole of 2009, the report added. The highest private equity investment was witnessed in August this year when it stood at a whopping USD 1,349.04 million. The median deal amount and the average value of private equity deals in October 2010 was USD 10 million and USD 14 million respectively. […]
The share of emerging markets in private equity deals has increased from 5 per cent to 30 per cent over the last decade, rivalling the proportion of deals in the USA and Europe, and it is expected to increase, according to a study which indicates that private equity's centre of gravity is shifting toward emerging markets which are witnessing accelerating returns. The study by IESE Business School and The Boston Consulting Group says returns from emerging markets have more than tripled since the 1990s to more than 17 per cent today, and the most attractive markets are India, Brazil, Turkey and Malaysia. The study, which is based on an analysis of the largest data set of its kind, has found that emerging markets' share of deals has increased steadily from 5 per cent in 1998 to 30 per cent in 2009, in contrast to the USA and Europe which accounted for 34 per cent and 38 per cent of the deals, respectively. Over the same period, emerging markets' share of deal volumes more than quadrupled to 21 per cent. […]
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