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Private Equity (PE) and Venture Capital (VC) funding in India needs to increase three-fold to 430 billion annually from the current level to shore up funding for small but promising companies, said a KPMG-CII report. Besides, it said, as the Indian economy expands, the country's investment needs are estimated to be over $1.25 trillion over the next three years. Higher PE/VC funding can contribute to the requirement by funding the growth of small but promising companies that are not able to tap equity and debt markets at the outset. It said that even in the case of listed companies, 40 per cent have market capitalisation of less than Rs 1.25 billion (Rs 125 crore), with Sensex at 17,000, and 80 per cent of the Bombay Stock Exchange (BSE) listed companies have revenues of less than Rs 100 crore. Thus, making a pitch for greater PE/VC paricipation in the country, the report said, “It is estimated that investments from PE and VC needs to be increased three fold, from a trailing level of $10 billion annually, to $30 billion.” […]
Venture capital (VC) fund Sequoia Capital’s exit from Kerala-based non-banking financial company Manappuram General Finance and Leasing Ltd two weeks ago is just the beginning of an avalanche of high-return exits lined up for this year. Nearly half a dozen VC and private equity (PE) firms Mint spoke with are preparing for at least a dozen portfolio exits as they reach the end of their investment horizons, and to cash in on an improving economy. Overall, experts see at least 50 exits over the next six-nine months. India has never seen more than 20 VC exits in a year. But in the first three months of 2010 alone, there have been 10 VC exits against three last year, according to research firm Venture Intelligence. The flood of profitable exits, experts say, would help further establish India as an investment destination for VCs and PE funds. […]
ICICI Bank, India's No. 2 lender, is in talks to buy a holding in Bank of Rajasthan from the Tayals, who control the small private-sector bank, the the Economic Times reported on Thursday. The Tayals, who had about 29 percent holding at end-December according to the Bombay Stock Exchange data, are also negotiating with other suitors, the newspaper said, quoting unnamed sources. Bank of Rajasthan has a market value of $324 million, and ICICI has indicated it is willing to pay more than the market price for the stake, it said. “There are differences on valuations and talks have not progressed … a deal could be sometime away,” the paper quoted a a senior banker familiar with the negotiations as saying […]
Hindustan Construction Company on Thursday said it has completed the acquisition of a 66 per cent stake in Swiss construction firm Karl Steiner AG. With the issuance of new shares as consideration for a 35 million Swiss francs (about Rs 140 crore) cash investment, HCC now owns a 66 per cent stake in Karl Steiner, the company said in a statement. The companies had entered into a pact in March this year for the deal. All regulatory approvals in India and Switzerland have been obtained for the deal, it said. […]
EIH Ltd has announced that the Board of Directors of the Company at its meeting held on May 05, 2010, has approved the acquisition of the 45.85% equity interest of Amex Investment Ltd, Hongkong (“Amex”) in its international hotel joint venture company. EIH Holdings Ltd British Virgin Islands for US$45 million. The acquisition will be undertaken by EIH Ltd, through its wholly owned subsidiary EIH International Ltd, British Virgin Islands. A letter of intent for the acquisition has been signed with the principal shareholder of Amex. The proposed transaction is subject to a number of conditions including mutual agreement of the formal transaction documents and applicable regulatory approvals. The joint venture currently has the business interests in Hotel Investments and Hotel Management Contracts. The JV has equity investments in existing Oberoi hotels in Mauritius, Bali Indonesia, Lombok Indonesia and Sahl Hasheesh Egypt. The JV has Long term hotel management contracts for each of those hotels in which it has invested as well for The Oberoi Zahra, Nile Cruiser in Egypt, in which there is no investment. The JV also has Long term hotel management contracts for new Oberoi hotel projects under construction or under planning in Dubai, Marrakech Morocco, Greece and a second hotel in Mauritius. […]
ICICI Venture is planning to launch a $222mn (Rs.1,000-crore) domestic real estate fund. It plans to close the fund in 6-12 months and will invest in projects in top five to seven cities. It was also looking to launch an offshore fund by the end of this year. Sanjeev Dasgupta, president, real estate, ICICI Venture, confirmed the plans but said that the exact amount is yet to be decided. He said that a domestic fund offers a lot more flexibility, as offshore funds are restricted by FDI norms. It is also difficult to raise an offshore fund in the current environment. Dasgupta said a number of projects which were not FDI-compliant were available at attractive rates now. […]
A study says India emerged as one of private equity investors' favourite investment destinations in April, with the volume of transactions rising three-fold to $840 million in comparison to the same month last year. According to the monthly report of VCCEdge, the financial platform of VCCircle.com, private equity deals in India amounted to $840 million in April, 2010, against $285 million in the corresponding period of the previous year. An upturn was also witnessed in terms of the number of deals recorded during the said period. In April this year, 35 PE transactions were reported, against 22 deals registered in the same period in 2009, the report added. However, the total value of PE deals reported in April was less than the quantum of investment made by these firms in March. The report said, “On a month-on-month basis, deals value in April, 2010, was lower than that in March, 2010. The deal activity began with slow momentum in February, 2010… accelerated in March, 2010. However, this pace could not be maintained and deal activity recorded a dip at $840 million in April, 2010. […]
When Chennai-based Everonn Education begins setting up international schools in the country next year, it plans to do so as a private limited entity under Section 25 of the Companies Act, 1956, and not as a trust. The reason: The company sees this as an alternative way of having a scalable model (which the trust structure does not allow as its bars payment of dividends). Increasingly, educational institutions in the country are taking innovative routes to expand. For example, schools that cannot go for the Section 25 option have begun turning to “smart equity” from private equity (PE) players to expand access to new technologies, build new set of services and add resources. This explains the $22-million (100 crore) deal that Reliance Equity Advisors — Reliance Capital’s PE arm — struck with Pathway World School recently. The stake acquired was, however, not disclosed. […]
Dealmaking is back in the private equity and venture capital circles with the economic recovery taking hold. After a pretty subdued 2008 and 2009, PE deals have breached $500 million mark every month since February, according to VCCEdge, the financial research platform of VCCircle. The gestation period for deals which doubled to 6-9 months, rising even up to a year in fiscal 2009, has also come down and deals in various stages of due diligence are finally seeing closures. Bharat Banka, MD & CEO, Aditya Birla Capital Advisors, said, “With the exception of any unanticipated shocks in the economy such as extremely weak monsoon or external shocks such as oil prices, the investment interest is expected to remain robust.” […]
New Delhi Television Ltd (NDTV) said that it has decided to call off its deal with US based Scripps Networks Interactive Inc. ‘The NDTV Group has decided to exercise its right to terminate the definitive agreements and is in the process of terminating them,’ a company statement said. In November, both the parties had entered into a deal where Scripps had agreed to pay 55 million dollars for acquiring a 69 per cent stake in NDTV Lifestyle. […]
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