In a growing aspirant economy such as India, education enjoys pride of place among heads of expenditure in most middle income homes. It is this spending that Kaizen—India’s first private equity (PE) fund being raised to focus on investing in education businesses—aims to tap into. The Kaizen Education Fund I, being put together by Reema Shetty, Akhil Shahani, Sandeep Aneja and Jetu Lalvani, who together have at least 65 years of experience in education and private equity, hopes to raise $100-150 million (Rs482-723 crore). “Education is as counter-cyclical as it gets. It’s a sector where people are willing to spend a disproportionate amount of their income to go back and reskill themselves even in a downturn,” Aneja said, adding the fund has received some commitments. […]

The Indian competition law regime, first enacted in 2002 and amended in 2007, has gained momentum in 2009, with the appointment of a new chairman and other members to the Competition Commission (CCI), amidst speculation that the rules on cartels, abuse of dominance and merger control will come into force later this year. Whilst the current economic climate means that M&A activity has inevitably taken a back seat, the new competition rules signal significant changes for foreign and domestic deals. In summary, once the law is in force, domestic and foreign mergers which meet certain turnover or asset thresholds must be notified to the CCI for clearance. According to the regulations, a deal is not likely to adversely affect competition in India unless at least two parties to a deal have a presence in India, namely (1) each party generates Rs 600 crore turnover in India or (2) each party has assets to the value of Rs 200 crore in India, in addition to satisfying other worldwide turnover/asset requirements. The 210-day wait —a deal breaker for many transactions — has been reduced to 30 days or 60 days for most deals, on par with international standards. […]

India is offloading its equity in the Manila-based Asian Development Bank (ADB), Indonesian news agency Antara said on Tuesday, quoting officials. Indonesia is ready to acquire 1.5 per cent of India's stake to increase its equity in the bank from current 5.5 per cent, the agency said. India owns a 6.3 per cent stake in the ADB, while China has a 6.4 per cent. […]

Following the steep decline in the equity market in 2008, some private equity (PE) firms that had invested in companies through warrants are now left with no option but to let them expire because shares on the open market are cheaper than the exercise price of the warrants. Warrants are securities that stakeholders use to purchase or increase equity in a company at a future date. An investor pays 10% of the value of the investment up front, and acquires the option of converting the warrants into shares any time within 18 months at a pre-decided price. This price is known as the exercise price. A Mint analysis of data provided by Delhi-based investment banking outfit SMC Capital Ltd shows that there are at least 13 companies in the National Stock Exchange’s S&P CNX 500 index in which PE investors had warrants exercisable after 1 January 2007. The S&P CNX 500 represents about 95% of the total market capitalization of the stocks listed on the exchange. This index declined by 57.13% in 2008. […]

Private equity players have made investments of $230 million in the microfinance sector in the last two years and the outlook for this segment looks upbeat as it provides a refuge from the global financial market turmoil. According to data compiled by Venture Intelligence, a research service focussed on private equity and venture capital, the microfinance sector witnessed as many as 14 deals worth $230 million during January 2007-March 2009. “Microfinance is sufficiently insulated from the global financial downturn. Besides, this sector provides a good way for investors to diversify their portfolio at a time when the urban and manufacturing-related sectors are witnessing a slump,” Venture Intelligence Managing Director and CEO Arun Natarajan said. […]