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The Securities and Exchange Board of India (Sebi) is considering a proposal, wherein foreign venture capital funds (VCFs) will need to have a minimum capitalisation of $100,000 to be eligible to invest in India. The rule is being framed in consultation with RBI, an official familiar with the development told ET. A foreign VCF looking to invest in India usually formed an investment holding firm in Mauritius with rudimentary capital, often not more than a few dollars. The investment company then filed for registration with Indian regulators, and once it got the approval, overseas investors were gradually roped in. Such a practice was followed because several foreign investors were uncomfortable in making commitments unless the offshore fund had obtained necessary approvals from the regulator. […]
With the market for new share issues still comatose, Qualified institutional placements, or QIPs, have replaced IPOs as the chosen method in corporate India for raising money. A steady stream of companies have used the QIP route, under which securities are placed with institutions much like private placements, to raise thousands of crores in recent weeks. And the flood is only set to increase in the coming weeks. About 30 more QIPs with an estimated value of Rs 40,000 crore could hit the Indian market this year, according to estimates by Thomson Reuters, a leading provider of business information. The biggest QIPs expected to take place are likely to be of Essar Oil (Rs 10,000 crore) and Cairn India (Rs 5,000 crore). […]
Venture capitalists and private equity players are now working overtime when it comes to new investments. Due diligence is taking more time than before. Anywhere between $5 to $ 8 billion is waiting to be pumped into the Indian market in the form of private equity. Slowdown-free sectors like healthcare and education are hot picks, besides those catering to domestic consumption. “Right now, we are evaluating proposals in diagnostics, logistics and energy saving,” says Srini Raju, co-founder of Peepul Capital. His fund has a war chest of $220 million of which $150 million has been invested in telecom and manufacturing companies. […]
Private equity (PE) and venture capital (VC) investors are looking to step up the pace of investments in the healthcare and lifesciences (HLS) sector. PE and VC players have invested over $2 billion into HLS companies in India over the past five years. ICICI Ventures, IFC (the PE arm of the World Bank),Kotak, Venture East and IL&FS are some of the big players who have been active in this space. In the recent past though, speciality PE firms have emerged to invest exclusively in this segment. Evolvence India LS, India Ventures and Sabre Capital’s Spring Healthcare fund are some PE funds in this category. […]
After being at the receiving end of investors’ wrath, the real estate sector is back on the radar of private equity (PE) investors. Real estate consultants say PE funds are now finding good investment opportunities in the sector. The high level of interest is quite clear in the recent wave of qualified institutional placements from real estate companies. According to Grant Thornton’s deal tracker, Orient Global, Sandstone Capital, HSBC and Och-Ziff Capital recently invested $325 million in Unitech. Standard Chartered Private Equity has pumped in an undisclosed sum in Man Infraconstruction. And TPG Capital and Fidelity have invested in the qualified institutional placement by Indiabulls. […]
Venture capital (VC) firms, that usually invest in early stage companies (also the riskiest), are now trying to stay invested in firms already in their portfolios from earlier funding rounds, with or without co-investors, even as there has been a dip in the overall funding activity. This trend among venture capitalists of funding firms they have already backed before, is partly driven by the high demand for investible firms that venture backers can fund. The paucity of such opportunities has led to VC investors, across the spectrum, eager to get a stake in these firms. Also, existing investors fear that they may soon become minority players in their own portfolio firms, if they don’t extend financial help. At least nine firms in the last five months have received subsequent rounds of funding where their previous investors have also participated. These include: […]
Private equity (PE) players are bullish about deal flows following the strong election mandate and expect the focus to be on growth-oriented sectors and improved sentiments in the equity market to provide an exit option. “India is predominantly growth capital market for private equity players. The case for India now becomes even more compelling with political stability. The valuations need to be looked in the context of growth quantum of earnings in future and certainty of achieving that. In a stable economic environment and moderate interest regime, the risk appetite does look up,” Bharat Banka, managing director and chief executive officer, of Aditya Birla Private Equity, said. Gaurav Malik, managing director of Olympus Capital Holdings Asia agreed and said conditions have improved since March, as negative news flow has stopped. […]
International Finance Corporation (IFC), the World Bank's lending arm, on Tuesday said it plans to invest close to $1 billion (about Rs 5,000 crore) in India in the next fiscal (July 2009-June 2010). “One billion dollar in India as a whole was done in the last year (July 2007-June 2008). This fiscal also we expect to do about the same amount…I think we would remain at the one billion dollar figure more or less for the next one or two years,” IFC South Asia Manager-Infrastructure Advisory Vipul Bhagat said. He further said that IFC is focused on investing in the country's infrastructural projects and close to 50 per cent investment would be in this sector. […]
The month of April saw private equity (PE) deals worth $493.94 million and the value of total number of such deals during the first four months of this year increased to $1.31 billion. The total number of private equity deals announced during the month of April 2009 stood at $493.94 million through 15 deals, global consultancy firm Grant Thornton said, adding that the total number of PE deals during the first four months of this year stood at 56 deals with an announced value of $1.31 billion. […]
The poll verdict could well be the turning point for private equity (PE) investors and investment bankers who were waiting on the sidelines of the Indian market for several months. With the installation of a stable government at the Centre likely to give a fillip to investor sentiment, dealmakers expect companies to target institutional investors with a slew of preferential equity issues over the next few months. Mergers and acquisitions (M&A) as well as PE deals have fallen in the past few months. According to Thomson Reuters, M&A volumes in the calendar year-to-date have crashed by 71% to $6.5 billion against $22.7 billion in the corresponding period last year. Similarly, PE deals have fallen 51.2% to $682 million. […]
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