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There are rumblings in the world of private equity (PE). The investors in the funds, known as limited partners (LPs) in trade parlance, have defaulted on their commitments to several PEs. At least four PE funds in India have been told by some of their major LPs that they would not chip in with the promised money. These PEs — which include big Indian VCs and offshore funds — are exploring legal recourse under terms laid down in the subscription agreement between them and LPs. It’s easier for an LP to back out if it has not yet invested in the fund pool. However, if it holds back investments after contributing a few tranches, the fund manager may freeze the money already invested. Indeed, a few funds ET spoke to did not rule out this possibility. One of the funds floated by an Indian financial services firm, which recently announced the completion of fund raising and even indicated a 25% return, has been told by two big US pension funds not to go ahead with the ‘draw down’. […]
UTI Asset Management is close to selling a 26 percent stake for $175-$200 million to one of at least four investors and private equity firms, valuing the firm at 7-8 percent of assets, banking sources said. UTI has held talks with U.S. money manager T Rowe Price , Japan's Shinsei Bank and private equity firms Actis and ChrysCapital for the deal, likely to close by late February, three banking sources and one company source with knowledge of the transaction said. The sources, including one who is directly involved in the negotiations, declined to be named as they were not authorised to speak to the media. One banking source said T Rowe Price was the front-runner. […]
At a time when corporates and private equity firms are either renegotiating on agreed prices for warrant conversion or backing out of such transactions, domestic real estate fund Kotak Realty has converted warrants in Sunteck Realty at the agreed price. With the conversion, Kotak Realty now controls 10% in the real estate firm. “We are bullish on Indian real estate. The fundamentals of many realty companies are still strong. We have converted the warrants at the agreed price,” Kotak Reality Fund CEO S Srinivasan told ET. Kotak Reality converted the warrants at Rs 1,167 per share. On Thursday, Sunteck Realty shares ended down 2.8% at Rs 1,547 on BSE. […]
At a time when private equity investments in India are slowing down, a study has found that PE-backed companies are more profitable than their non-PE backed peers. The study, conducted by Venture Intelligence, says PE- and venture capital-backed companies are growing significantly faster than non-PE backed companies as well as market indices such as Sensex, Nifty and CNX midcap. While PE and VC funds have invested $32 billion in Indian companies in the last three years, the value addition has been much better. On an average, PE-backed companies grew at 24.9 per cent compared to 15.5 per cent by non-PE backed companies. […]
GE Equity, private equity arm of the US-based conglomerate General Electric (GE), is picking 30% stake in Chennai-based aircraft and spacecraft parts maker Kerns Aero Products for Rs 10 crore, said a person with direct knowledge of the transaction. The deal would value Kerns Aero at Rs 33.3 crore and the proceeds from the stake sale will help it to fund expansion plans in the country, said the person. As per the transaction, Kerns Aero Products will issue 10.35 lakh mandatory convertible preference shares of Rs 10 each at a premium of Rs 87 to GE Equity Capital representing around 30% of the expanded capital. […]
The Astro Group of Malaysia has picked up a 50 per cent stake in Mogae Digital and will invest $ 5 million in the venture. The joint venture has a slew of launches this year that include a social-networking portal for mobile phones, games and comics for mobiles and a local search engine. “Mogae Digital intends to be at the forefront of the content revolution that will soon unfold with the launch of 3G services in India. But our unique model, while preparing for 3G related opportunities, focuses first on the available 300 million current mobile users.” says Sandeep Goyal, chairman, Mogae Digital. Adds Raghavendra Madhav, executive director, Astro Group, “The products created by Mogae Digital are versatile and effectively engage consumers at different levels. Given Astro's already large interest in media space, Mogae Digital will be a good addition to our bouquet.” […]
Gateway Distriparks (GDL), which holds 74% equity in its unlisted subsidiary company Gateway East India (GEIPL), Visakhapatnam, has acquired the balance 26% equity from the other shareholders in GEIPL. With this acquisition, GEIPL has become a wholly owned subsidiary company of GDL. GDL has paid a consideration of Rs 46.8 million to acquire 11.70 lakh equity shares of face value of Rs 10 each in GEIPL, constituting 26% of its paid up equity capital. This acquisition will enable GDL in expanding the scope of its operations and consolidate its presence in the eastern and southern region of India. […]
Deutsche Bank is buying 20% stake in Rama Cylinders, a Mumbai-based high-pressure cylinder manufacturer, for Rs 84 crore, a person directly involved in the transaction told ET. The deal values Vashu Ramsinghani-promoted Rama Cylinders at Rs 420 crore. “The transaction involves issue of around 60 lakh equity shares and warrants to Deutsche Bank by the Indian company,” the person said. The proposed investment is set to take place in two tranches through fresh issue of equity by the Indian company. First, Deutsche Bank would buy around 45 lakh shares in Rama Cylinders. Then, the remaining stake would be bought over after conversion of around 15 lakh warrants into equity shares. […]
India-focused IL&FS Realty Fund has picked up a 15% stake in infrastructure Ventures India, a special purpose vehicle (SPV) floated by Mumbai-based developer Akruti City, for Rs 200 crore. Infrastructure Ventures India is primarily a public-private-partnership (PPP) project formed for developing housing infrastructure for the Mumbai police in suburban Ghatkopar. When contacted, Akruti City chairman Hemant Shah declined to comment on the deal. However, a source close to the development said: “Since its a PPP project, the SPV will get additional FSI for development. Apart from Akruti, there are other equity holders in the SPV.” […]
Maharashtra Airport Development Company is picking up a 25% stake in Duke Aviation's upcoming maintenance, repair and overhaul (MRO) facility in the special economic zone at Nagpur. In return the Maharashtra Airport Development Company will give about 30 acres of land to Duke Aviation which plans to undertake heavy maintenance of aircraft at the MRO facility, according to executives connected with the development. The MADC has already handed over six acres of land for Rs 60 lakhs to Duke Aviation, where a Bhoomi Pujan would be done on February 5. When contacted, Maharashtra Airport Development Company vice chairman RC Sinha told ET: “We are in talks for 25% stake in Duke Aviation in lieu of the land given to them in the SEZ. A report has been placed before the board. The finance secretary and other officials will take a final call soon.” […]
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