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The government is set to limit foreign direct investment (FDI) in private security services at 49%, a decision likely to trigger consolidation and ownership change in the Rs 10,000-crore domestic security services industry. Several foreign security firms currently have presence in India. The development is expected to help home-grown security firms like SIS and Tops to consolidate their position in the fast-growing sector and force foreign players like Group4S to restructure their holdings and offload the surplus FDI in favour of domestic players. The domestic private security industry, growing at 25% annually, employs over 7 million. Thanks to the lack of specific rules, any foreign company can hold up to 100% stake in Indian security companies. The Union home ministry has now stepped in to limit their participation in Indian companies citing security reasons. […]
Digital advertising and e-commerce firms in India are catching the fancy of private equity (PE) and venture capital (VC) firms. PE and VC investments in the online advertising and marketing space, which had gone down to $16 million in the first half of 2009, have shown a recovery and touched $28 million, or Rs 129 crore, in the first half of this year. Talking to ET, Mahendra Swarup, president, Indian Venture Capital Association, said: “Both PE and VC firms are active in the online advertising and marketing space. In fact, VC funds are more active in the sector as returns are higher. Typically, expectation of VC and PE firms is three-to-five times of their investments. But, in the case of digital advertising and marketing, which largely deal with mobile ad network, the expectation is 8-12 times of the investments.” The deal size in this sector varies between $5 million and $15 million. […]
Private equity (PE) deals in listed companies are set to rise if the Securities and Exchange Board of India (Sebi) approves the Achutan Committee’s recommendations on the takeover code. However, buyouts are likely to dwindle, say major PE players in the country. According to estimates, lack of good opportunities has kept around $30 billion PE money waiting to be deployed. “The 25 per cent mark is positive, as PEs want to take their stake beyond 15 per cent in companies they invest in,” said Shahzaad Dalal, vice-chairman and managing director, IL&FS Investment Managers. Among the BSE 500 companies, 98 have single public shareholders with 10-14.99 per cent holding, according to a study by SMC Capital. For such investors, the upward revision of the takeover threshold limit can be a huge opportunity to increase their holding to 25 per cent without an open offer, say analysts. […]
At a time when global markets such as the US and Europe are still crawling out of economic slowdown, private equity (PE) investments in India are expected to gain momentum and hit the previous peak of 2007. Venture capital (VC) and PE fund flows in the country are expected to rebound to $17 billion for the calendar year 2010, according to a survey by consulting firm Bain & Company. Of this, a little less than half has already been invested in the first half of the year and the remaining $8-9 billion is expected to be infused by December. “Action is heating up in the PE space and a host of limited partners from the global markets, especially the US, are now looking at India as an investment destination,” said Sri Rajan, partner and head of the PE practice in India at Bain & Company. Key sectors that are likely to witness significant action over the next few months in the country include infrastructure, energy and healthcare, he said. […]
Takeovers are set to get costlier with a Sebi panel favouring making it mandatory for the acquirer to make an offer for up to 100 per cent stake in any listed company. As of now, an open offer for a minimum of 20 per cent in the target company is required to be made by any entity that has purchased 15 per cent equity, either from the promoters or from the open market. The Securities and Exchange Board of India has set up a Takeover Regulatory Advisory Committee, with former Securities Appellate Tribunal presiding officer C Achuthan as chairman. The Committee, which prepared the report in consultation with the various stakeholders, is believed to have recommended making suitable changes in the existing takeover regulations. […]
Barely weeks after the original promoters of supermarket chain Nilgiri Dairy Farm and PE firm Actis decided to resolve their differences, another dispute involving a PE firm and founder promoters has come to the fore. The original promoters of JRG Securities, the Kochi-based broking firm where Barings PE Partners (BPEP) India has a 49.22% stake, have moved the CLB seeking to stop the proposed rights issue. Retail chain Subhiksha had serious differences with its investors including Azim Premji-owned Zash Investments after it ran into trouble, or vice versa. A host of factors including the differences over the pace of growth and options the company needs to take to expand, management style and lack of detailed agreement in likely areas of conflict is leading to disputes and litigation, say observers. “In 90% of the cases problems arise because of the lack of a detailed agreement.” […]
With the improving domestic entrepreneurial environment and favourable investment scenario, the venture capital industry in India and other emerging markets is expected to expand in the next five years, while it may shrink in developed nations, says a survey. According to Deloitte's 2010 Global Venture Capital Survey, the majority of venture capitalists in China, India and Brazil expect the number of venture firms to increase between now and 2015, while 62 per cent of respondents globally expect the number of venture firms to decrease during the same timeframe. The report said that 99 per cent of respondents in China expect the number of venture capital firms to increase in their country in the period under review, followed by Brazil (97 per cent) and India (85 per cent). […]
The government is planning to set up a Rs 10,000-crore venture capital (VC) fund for financing new drug discovery projects in the country. “We will soon invite bids from consultancy firms for establishing a venture capital fund in public-private- -partnership that would finance research and development (R&D) activities in the pharmaceutical segment,” Department of Pharmaceuticals Secretary Ashok Kumar told reporters on the sidelines of a Ficci event. The department will soon invite bids from advisors to prepare a detailed project report on the proposed fund, Kumar said. The initial target will be to raise up to Rs 3,000 crore by 2011-12, and it would be gradually increased to Rs 10,000 crore by 2015, he added. National Institute of Public Finance and Policy (NIPFP) is advising the department in the process of selecting an agency to design the fund. […]
The government is planning to set up a Rs.3,000-crore venture capital fund to support the growth of the country's pharma industry. Ashok Kumar, secretary, pharmaceutical department in the ministry of chemicals, Monday announced this while inaugurating a national convention on biopharma here. He said the National Institute of Public Finance and Policy (NIPFP) is finalising the bid document and the expression of interest for setting up the fund will be issued this month, according to a release by industry lobby FICCI. The release quoted Kumar as saying that the government earlier had issued an expression of interest for technical and financial bids for the selection of a global level consultant for preparation of a detailed project report for developing India as a drug discovery and pharma innovation hub by 2020. […]
The value of private equity- backed deals globally stood at $43.3 billion in the April-June quarter of 2010, registering a 60 per cent jump over the previous quarter, says the latest study. In the January-March period of 2010, the value of such private equity (PE) backed deals was $27.1 billion, according to research firm Preqin. In terms of number of deals too, there was a quarter-on-quarter increase, with 411 PE deals being announced in the second quarter of 2010, up from 356 in Q1 of 2009. “Despite continuing challenges in the buyout market in this post-credit crunch landscape, deal flow in Q2 of 2010 represents the strongest quarter for buyout deals since the onset of the financial crisis in 2008,” said Preqin Managing Analyst (Buyout Deals) Manuel Carvalho. […]
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