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Kingfisher Airline’s embattled chairman said he is close to sealing a $370m deal with an Indian private investor and a banking consortium that would save his cash-strapped carrier. Vijay Mallya said in an interview with the Financial Times he would soon close a deal with 14 banks led by State Bank of India, the country’s largest lender by revenues, that would provide the airline with working capital – a short-term loan for the running of the company – of […] Mergers and acquisitions (M&A) in India have slumped by 41.5 per cent to $26.8 billion during first nine months of 2011 as rising interest rates and uncertainties in the global economy dampened sentiments, a report showed Friday. During January-September 2011 period, 177 mergers and acquisitions deals, valued at $26.8 billion, took place which is 16.9 per cent lower in volume and 41.5 per cent lower in terms of value when compared to the same period in 2010, according to data compiled by mergermarket, an independent mergers and acquisitions intelligence firm. Inbound deals accounted for 88.1 per cent of all Indian M&A activity, four times that of Indian investments overseas. Inbound deals stood at $7.32 billion in July-September quarter as compared to $2.65 billion in the previous quarter. […] The energy sector has attracted maximum investments from the private equity players during July-September, the third quarter of calendar year 2011. Of the $2.25 billion worth PE placements across 98 deals in Indian companies during the quarter, about $823 million, or 37%, was in 16 energy-sector companies, according to data by Chennai-based research firm Venture Intelligence. Vikram Uttam Singh, head-private equity, KPMG, said, “We saw deals of close to $5 billion in the energy space last year and what is happening now is an extension of it. One of the reasons for this is that until recently very few deals of this size were available in the market. Power industry is very capital intensive and hence the deal sizes tend to be huge,” he said. […] Private equity investment in India touched $1.91 billion in July-September this year, which was 18 per cent higher than that in the same period last year. For the third quarter of 2011, PE deal values amounted to $1.91 billion against $1.71 billion in the same period last year, according to Grant Thornton’s ‘Dealtracker’ report. In terms of number, the July-September quarter saw 94 deals compared with 58 deals in the same period last year. “Private equity investments during Q3 2011 have shown a marginal growth in value and a high growth in volume over the same period for the previous year,” Grant Thornton India Partner and Practice Leader, Valuations, Ms Srividya C.G., said. […] The prolonged funk in the primary market has meant private equity players continue to stare longingly at the exit door. With three quarters of the calendar year gone, there have been only 86 exits valued at $2.1 billion so far, about half the 174 worth $4.5 billion seen in 2010, according to data from VCCEdge. Generally speaking, private equity firms head for the exit 3 to 7 years after investing in a company — with the most preferred route being initial public offerings. Partha Choudhury, managing director, SEAF India Investment Advisors, a private equity firm, said the refrain in 2010 was that the optimism of the IPO market will continue into 2011, but that was not to be. […] The threshold for making a mandatory open offer to minority shareholders has been upped to 25% and the acquirer will need to make an offer for at least an additional 26% of the equity of the company, according to the new takeover code. Earlier the trigger for making an open offer to small shareholders was 15% with the buyer offering to buy at least 20% of the outstanding equity. The new takeover code exempts inter se transfers of shares amongst promoters from making an open offer. The substantial acquisitions of shares and takeovers 2011, notified on Friday by the Securities and Exchange Board of India (Sebi) stipulates that open offer for acquiring shares, to be made by the acquirer and persons acting in concert with him, shall be for at least 26% of the total shares of the target company. […] Private equity investment in India's real estate sector declined by around 20.2 per cent to $ 831 million (about Rs 3,740 crore) in the first five months this fiscal due to sluggish demand. Factors like the tight availability of funds with PE players and delays in project execution prompted fund houses to adopt a cautious approach toward the real estate sector, according to data compiled by research firm Venture Intelligence. PE players had pumped $ 1,041 million (around Rs 4,685 crore) into the realty sector during the April-August period of the previous fiscal, as per the data. […] The Planning Commission expressed its desire that India should set up a sovereign wealth fund with an initial corpus of $10 billion, mainly to invest in energy and mining assets overseas, reports said, quoting Deputy Chairman Montek Singh Ahluwalia He said “Sovereign Wealth Fund is something that the Finance Ministry is looking at. We have suggested to start with $10 billion.” Sovereign Wealth Fund is a government-owned corpus where money is pooled in from state resources to invest in overseas assets. India has been mulling to set up its own fund to acquire strategic overseas assets in mining and energy segments to meet its future needs. […] The year 2011 has so far aggregated $7.57 billion worth of private equity investments across 274 deals, registering a 25 per cent jump over $6.07 billion of investments for the same period (Jan-August) last year, according to data from Four-S Services. The average deal size also increased from $31.1 million to $33.1 million during the same period. August aggregated $522.4 million of investments in Indian companies across 35 deals compared to $1.29 billion across 31 deals for the same period last year. The month of August last year was one of the best in terms of PE investments marked by some high value deals. […] India has freed Indian promoters of insurance companies to cut equity stakes to 26 percent within less than the decade previously required, a senior finance ministry official said on Thursday, marking a step set to hasten industry consolidation. “An Indian promoter can scale down its equity up to a level of 26 percent at any time after registration under the Act,” S.K. Mohanty, an official of the finance ministry's department of financial services, said in a letter, a copy of which was obtained by Reuters. When contacted, Mohanty confirmed the letter, but declined further comment. The move, long sought by industry, could clear the way for a deal by Reliance Life Insurance, a unit of Reliance Capital, to sell a stake of 26 percent to Japan's Nippon Life Insurance Company for $680 million. […] |