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Education has emerged one of the most lucrative sectors in India, making private equity investors line up in big numbers to the $80-billion plus industry. Numbers crunched by education-focused private equity fund Kaizen Management Advisors show that venture capitalists and private equity players have pumped in excess of $140 million so far this year, 50% more than what they invested in the whole of 2009. “We feel the education sector offers tremendous growth potential and is poised for rapid growth in the next few years,” says Ramesh Venkat, chief executive of Reliance Equity Advisors, a private equity arm of Reliance Capital, which entered the segment a few months ago by investing about Rs 100 crore in Pathways World School, a primary and higher secondary school. The total VC/PE investment into the sector is expected to be close to $300 million this year, says Sandeep Aneja, managing director of Kaizen Management Advisors. Dhanraj Bhagat, partner at research firm Grant Thornton, says investments into education will grow 40-50 % every year. […]
Valeo today announced that it now owns 100% of the capital in its electrical systems manufacturing entity based in Pune, India. Valeo previously held a 66.7% stake and the N.K. Minda Group 33.3%. The company, which produces alternators and starters for passenger cars, will be named Valeo Engine and Electrical Systems India Private Ltd. This transaction is in line with Valeo's strategy to reinforce its presence in high-growth emerging countries. Valeo plans to devote over 60% of its investments to these countries in order to reinforce its positions, notably in China, India, Brazil, ASEAN, Russia and Turkey. The Group has been present in India since 1997. It employs around 1,000 people at four production plants, in Chennai (transmissions and friction materials) and Pune (security systems and electrical systems), and at the Valeo Engineering Center India in Chennai. The production of lighting systems and wiper systems will be launched in India later this year. […]
ICICI Bank Ltd is acquiring Bank of Rajasthan Ltd for around Rs3,000 crore in a share swap transaction. Interestingly, its market capitalization has fallen by around Rs7,200 crore, around 2.3 times the acquisition amount. That’s a big thumbs-down from the market. Of course, it must be noted here that the broad markets fell by around 3% on Wednesday, and ICICI shares would have lost around Rs3,000 crore in value even if they only mimicked the drop in the markets. Even so, investors have demonstrated that they are highly disappointed with the deal, and especially the valuation. Bank of Rajasthan had an adjusted book value worth Rs559 crore at the end of December, so the acquisition price works out to 5.5 times book value. Other old private sector banks such as Karur Vysya Bank Ltd, Federal Bank Ltd and South Indian Bank Ltd trade between one and two times their book value. What’s more, Bank of Rajasthan is running losses and banks such as Axis Bank Ltd and Yes Bank Ltd which have high profit margins trade at much lower price-book multiples. […]
The rise in the stock market in the past year may have brought cheer to most investors, but not to private equity (PE) funds. The equity rebound has had promoters demanding valuations 20-30% higher than the estimates of PE investors. The mismatch is resulting in at least one-third of the deals under negotiations falling through, say PE firms. This is on top of the usual 30-40% drop in deals in the initial stages because of hurdles over business plans, management teams or performance. “That (stock market rise) tends to impact deal closings as certain promoters, who may have been happy at the valuations discussed pre-surge, try to renegotiate valuations upward when markets surge,” said Jacob Kurian, partner at PE fund New Silk Route Advisors Pvt. Ltd. K. Srinivasan, managing partner at BTS Investment Advisors Pvt. Ltd, said the stock market surge “is definitely not helping us in deal closing. Valuations are shooting through the roof”. […]
In what would be the second-biggest private equity investment in the Indian life sciences sector in the last 12 months, global PE firm Kohlberg Kravis Roberts & Co (KKR) is close to investing nearly $50 million (around Rs 225 crore) in Pune-based Emcure Pharmaceuticals, said industry sources. The biggest PE deal in the segment recently was New Silk Route’s $55 million (Rs 248 crore) investment in Chandigarh-based Nectar Life Sciences this February. The Emcure and Nectar deals signal the recovery of PE investments in the Indian life sciences sector, which had hit a low in FY2009 following the global financial crisis. According to sources, KKR and PE giant Blackstone had been talking to Emcure for some time now, but KKR is the front-runner now. As on December 31, 2009, KKR has $52.2 billion (Rs 2,34,900 crore) in assets under management worldwide. […]
Within three years of its launch, home-grown INX Media—launched by Indrani Mukerjea and ex-Star India CEO Peter Mukerjea—will become a foreign-owned entity. Mauritius-based private equity firm New Silk Route (NSR) is set to scale up its stake in the loss making INX Media from the current 20% to 80% by buying out stakes of some of the existing foreign and domestic investors. Going forward, NSE Mauritius will also fund the expansion of INX Media that is going to launch nine new television channels under the 9X brand. INX has been amidst a financial restructuring since last 10-12 months as a result it divested 9X to Zee Tele Films last month. In order to resurrect INX Media, NSR has not only agreed to infuse Rs 55 crore but will also pump in more money as per the business needs of the company. NSE Mauritius has taken upon itself to weave the turnaround of INX Media, sources said. Upto 100% foreign investment is permitted in the non-news channels. […]
US-based Darby Private Equity and India's IL&FS Investment Managers are among six bidders for the private equity arm of Axis Bank, the Economic Times reported on Tuesday. The bidders include Aditya Birla Private Equity and Shapoorji Pallonji Group, both based in India, the newspaper said, citing two unidentified executives involved in the process. The last date for receiving the bids was May 15, it said. […]
The Carlyle Group spent half of its invested capital last year on “corporate and real estate transactions”, as the private equity giant concentrated on fundraising during a difficult time for dealmaking and exits in the buyout industry. According to its annual report, released yesterday, Carlyle invested and committed $5.2bn (€4.1bn) last year. Of that amount, $2.7bn was spent on 47 “new corporate and real estate transactions with a cumulative enterprise value of more than $4.4bn”. These transactions included 23 in new real estate deals worth $524m and an additional $501m in residential mortgage-backed securities. Like other private equity firms, Carlyle generated few exits from its investments last year. Four of its Chinese portfolio companies went public, raising $3.8bn, and US-based SS&C Technologies Holdings raised $160.5m through its listing on the Nasdaq stock exchange. […]
Private sector Bank of Rajasthan (BoR) Tuesday said its board has approved merger with India’s largest private sector lender, ICICI Bank, through a share swap. BoR’s managing director and chief executive G. Padmanabhan said the board has given its in-principle approval for the merger. The share-swap ratio is likely to be decided by May 23. In a regulatory statement, BoR said: “The dominant shareholders of the Bank of Rajasthan (transferor bank) have entered into an agreement on May 18 with the ICICI Bank (transferee bank) for proposing an amalgamation of both the transferor bank and transferee bank.” […]
Emerging markets fund firm Ashmore said on Thursday it has launched a fund jointly with power trading firm PTC India that aims to raise $750 million to finance power projects across all energy-related sectors in India. India's power sector, beset by a peak power deficit of 12 percent, has struggled to attract foreign investment in recent years, but the tide seems to be changing. In March, a group of investors including Morgan Stanley's infrastructure arm, Goldman Sachs, and General Atlantic said it invested $425 million in Asian Genco Pte Ltd, which has stakes in power generation assets in India. […]
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