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While companies engaged in infrastructure may be the apple of the eye for investors making a beeline for Asia, a group of private equity (PE) investors think differently. They are looking to cash in on the growth of companies that focus on natural resources in India and China. A group of PE investors has appointed investment and strategic advisory company Origo Sino-India as their consultant. “Origo is raising at least $100 million (Rs 400 crore) for the proposed fund which is going to invest in companies that operate in iron ore, renewable energy, coal, wood/forestry and other relevant sectors,” a spokesperson told Business Line. […]
Notwithstanding the sub-prime crisis in the US, private equity deals have grown faster in the second half of the calendar year with global biggies Goldman Sachs sealing five deals, followed by Merrill Lynch and Morgan Stanley with three each in September and October this year. According to Grant Thornton’s dealtracker, 207 PE deals valued at $7.46 billion were announced during the first six months of 2007. The total deal value has nearly doubled in the last four months, with the number of PE deals increasing to 336, valued at $13.62 billion, during the first 10 months of the year. “Large funds who want to make significant investments in India are coming here. The sub-prime crisis in the US has impacted the share price of the big Wall Street firms but has not led to diminished interest from them in the India growth story,” said C G Srividya, partner, corporate advisory services, Grant Thornton India. […]
Global real estate majors such as Dubai World, Trump Organisation of US, Smart City of Dubai, Kishimoto Gordon Dalaya, Khuyool Investments, Bonyan Holding, Plus Properties, ABG Group and Al Fara’s Properties are descending on the Indian real estate market with an investment of around $20-25 billion in the next 12-18 months. Top-level management teams of around 50 global developers are currently in India scouting for joint venture partners and tie-ups with various state governments to enter one of the booming property market in the world. Officials close to the developments said that over 200 meetings were held between the representatives of foreign real estate firms and Indian companies and over a dozen JVs are in the final stages. DAMAC Holding (a Dubai-based leading real estate firm ) chairman and founder Hussain Sajwani said they have firmed up plans to invest around $3-5 billion in the Indian market. “We are in negotiations with various Indian developers for a possible joint venture, and hope to enter the market in the next 12 months,” he said. […]
Over the last year or two, they have been the target of policy change agents in the West. With their investment numbers swelling by the day, private equity, which has been dubbed by some of its adversaries as the new barbarians, is set to come under greater scrutiny in the markets here just as it is in the UK and Europe. India’s financial regulators — RBI and SEBI — and the government are expected to sit together to consider the approach to adopt towards this asset class. The banking regulator has already indicated to the government its uneasiness about PE in certain segments. Like in the US and some other markets, regulation is yet to embrace buyout funds or PE as they are popularly known here. But with the growth in their size and the perception of such funds operating in a twilight zone away from regulatory glare (considering that requirements of registration with regulators are not mandated), policymakers appear to be on course to take a close look at their operations. It sounds strange, but it is a fact that policy managers in India are yet to collate the figures of PE funds in India to ascertain in which sectors and firms the buyout funds are pouring money into. They appear to be in good company. In many other jurisdictions, too, the availability of quantitative data is limited. Policy prescriptions need to wait until then, those associated with the exercise say. […]
After infrastructure and real estate, private equity (PE) funds are stepping up investments in the booming hospitality sector. Biggies such as Lehman Brothers and Kotak Mahindra Realty Fund have kicked off negotiations with several players in the hospitality industry. Besides the metros, investments could pour into tier II cities — Hyderabad, Ahmedabad and Pune — as well. US-based Sun Apollo Ventures LLC is set to follow suit while Blackstone is open to funding this segment in due course. Kotak Mahindra Realty Fund has already made a couple of investments in hospitality projects. “We are bullish on the business and budget hotel segment in India. Our company has invested in two projects and are considering many more in the sector”, said Kotak Realty Fund CEO Mr Sriniwasan. Kotak Mahindra Realty Fund invested Rs 32 crore in Lemon Tree, a budget hotel chain. This was followed by a Rs 45 crore investment in the Pride groups, adds Sriniwasan. The company is also keen on investing in tier II cities. “The return on investment could be quite high in these cities, thanks to the large professional and student population”, he said. NYSE-listed Lehman Brothers had invested around $ 100 million in the Kishore Biyani-promoted Future Capital Holdings to fund hotel projects in India. […]
India’s private equity story is getting bigger even as the global credit crunch is squeezing the funds mopup globally. It is believed that private equity funds are in the midst of raising a jaw-dropping $48 billion for the Indian market by 2010. And the way the Indian economy is growing, experts opine the figure could be bigger. “Since 2003, the Indian economy is growing at 8–9% annually in real terms and at 13–15% in nominal terms (including inflation). Some sectors (services and high-end manufacturing) are growing at 10–14% in real terms and 15–20% in nominal terms, thereby attracting VC-PE investment. If this kind of growth continues, the economy can easily absorb $60 billion during 2007–10 and as much as $500 billion during 2007–20,”’ according to Evalueserve chairman Alok Aggarwal. Several PE firms would be willing to invest even more if they saw good investment opportunities, he added. […]
To measure media growth, advertising spends as a ratio of private consumption rather than GDP (gross domestic product) is a much better indicator. In the next five years, India’s ad expenditure as a ratio of private consumption will be 1.2 per cent,” according to Akhil Gupta, chairman and managing director of Blackstone Advisors India Private Limited. Gupta was speaking at a conference organised by the International Newspaper Marketing Association in New Delhi. Traditionally, all markets measure advertising expenditure as a ratio of GDP and India’s current ad spends, at .34 per cent of GDP, are much below the one per cent average clocked by developed countries. According to Gupta, India’s media industry is at an inflexion point and is expected to see an explosion in advertising. “For private equity investors, the media is right at the top and a favoured investment opportunity only after infrastructure,” he said, adding that the challenge will be to grow print media’s share from the current 45 per cent of total advertising. […]
Private equity (PE) players appear to have shifted focus to education firms targeting the domestic market. Thanks to a booming economy and talent shortage, PEs expect the demand for services from such firms to pick up. Already, the sector has seen a number of PE deals and the trend is likely to continue, observers say. Companies in the education segment usually offer online tutoring services for clients abroad or tap the domestic market by setting up vocational training and coaching centers. While the investment activity earlier centered on export focussed-education companies, the focus has shifted to training institutes that target the domestic market. For example, private equity firm Gaja Capital partners invested $8.25 million in education and career counseling entity Career launcher. Similarly, Helix investments pumped in $12 million into preparatory education company Mahesh Tutorials and SAIF partners invested $10 million in English training academy Veta, plus an undisclosed sum in another vocational training company, ICA Infotech. […]
Indian companies received more than $74 million (Rs290.8 crore) venture capital funding in October. Deals included investments in sectors ranging between e-learning, digital media and engineering solutions outsourcing. The single largest deal was struck by online travel portal Makemytrip.com, which received $15 million in its third round of funding. The New Delhi-based portal, which plans to go for an initial public offering by 2009, received funding from the US-based hedge fund Tiger Fund, along with existing investors Helion Venture Partners, Sierra Ventures and SAIF Partners. Online education and e-learning services emerged as the flavour of the season as venture capital firms struck three deals in this space in the last month—Mumbai-based Hurix Systems Pvt. Ltd received $5.1 million from Helion Venture Partners; TutorVista.com, an online tutorials company started by serial entrepreneur K. Ganesh, received $2.5 million from Manipal Education Group; Mumbai-based e-learning services company 24×7 Learning Solutions Pvt. Ltd received $4 million from Capital18, the venture capital arm of media group Network18. All three companies have had earlier rounds of funding. Digital media was another sector popular with venture capital firms—New Delhi-based Live Media and Bangalore-based Tag Media Network, which operate in-store television networks for advertising and marketing, received funding from Draper Fisher Jurvetson (DFJ) and Intel Capital, respectively. The month also saw investments in outsourcing services companies such as New Delhi-based RT Outsourcing Services Ltd by Motilal Oswal Venture Capital, Indo-US outfit Satellier Llc. by Sequoia Capital India and engineering and technology services company Neilsoft Ltd. […]
It’s a total rockfest on dealstreet. For the first 10 months of the year, the total value of mergers & acquisition (M&A) and private equity(PE) deals involving India Inc has more than doubled to a staggering $63.5 billion compared to $30.3 billion in the same period last year. While the billion-dollar strategic M&A deals hogged the limelight in the early part of this year, PE investments are leading the way in the second half. For instance, the total value of PE deals between January and October has shot up to $13.62 billion against $5.93 billion in the corresponding period last year, according to the latest dealtracker by advisory firm Grant Thornton. During the period, the volume of PE deals increased by 32% to 380 deals. This means that the average size of PE deals this year also increased from $26 million to $40 million. […]
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