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One of the largest global private equity (PE) fund was close to finalising a deal with a north-based company. However, following the changes in the global economic environment, the fund’s US-headquarters instructed the Indian arm to go slow over the deal citing concerns over the falling valuations. There are many such instances where deals are taking a longer time to close or at times PE firms are going back on their commitments. Compared to the first nine months of last year, this year has seen a dip in the number of transactions as well as the ticket size. Private equity firms have begun to cherry pick on deals and are becoming cautious in their investment strategy, unlike in the past where there was too much money chasing such deals. […]
Software firm Mastek Ltd said on Monday, Nalanda India Fund Ltd has acquired 5.2 percent stake in the company through market purchases, to take its shareholding to 9.99 percent. Nalanda India Fund, floated by private equity firm Nalanda Capital, has a corpus of $400 million, its website said. Shares in Mastek were up more than 3 percent at 220.10 rupees in a weak Mumbai market.(Reuters) […]
IL&FS Realty Fund, a private equity fund managed by Infrastructure Leasing and Financial Services (IL&FS), has picked up 30% stake in JB Pharma SEZ for $15 million (Rs 75 crore). Two nationalised banks — State Bank of India (SBI) and State Bank of Mysore — have financed the Rs 84 crore debt to the special economic zone (SEZ) project. JB Pharma SEZ has been formed to set up a pharma SEZ. It’s jointly promoted by the real estate firm HBS Realtors and JB Mody family — the promoters of JB Chemicals and Pharmaceuticals — at Panoli in Gujarat. Consulting firm Ernst & Young (E&Y) was the advisor to JB SEZ’s fund raising. The total cost of the project is estimated at around Rs 160 crore. Confirming the development, Sandeep Shah, managing director, HBS Realtors, said, “The promoters have diluted 30% equity stake in the SEZ project to IL&FS Reality. Post-dilution, the promoters will hold 35% stake each in the project.” […]
Pune-headquartered DS Kulkarni Developers has notified that the board of directors of the company at its meeting has decided to pick 51% stake in DSK Global Education & Research. With the acquisition of shares, DSK Global Education & Research will become a subsidiary of the company. D.S. Kulkarni Developers Limited engages in the civil construction and real estate development primarily in India. It operates principally in Pune and Mumbai cities of Maharashtra state.(Top News) […]
Private equity firms that are going through troubled times across the world, have resorted to various alternatives including diversification of their portfolio to adjust to the present economic constraints. PE firms are mainly diversifying into infrastructure assets, debt funds and energy technology investments, as institutional investors believe there would be stable cash flows into these sectors. “I think what you are going to see is a natural evolution of firms taking their networks and their brand into other fields where they can get a return,” global PE and investment advisory firm CVC Capital Partners Partner Marc St John said. PricewaterhouseCoopers in its Global Private Equity Report 2008 has said “private equity firms are taking advantage of financial turmoil to diversify either by buying new investment businesses from within troubled banks or by hiring experienced investment banking executives who can spearhead expansion into new asset classes and geographies.” […]
Indian real estate developer Unitech Ltd is in talks with foreign operators to sell 26-45 percent stake in its nascent telecoms unit, and expects to make an announcement next week, a top official said on Friday. “We are confident that we will be able to shortly close the transaction,” Managing Director Sanjay Chandra he told reporters on the sidelines of a conference. He declined to identify the likely partner, how much it hoped to raise from the sale or confirm market talk that Norwegian telecom group Telenor was a suitor. […]
As the global credit crisis casts its spell on the private equity (PE) firms in India, fund-raising has witnessed a significant dip. India-dedicated firms raised $1.8 billion through five funds in the second quarter of this financial year, down 60% compared to the same period a year ago when 11 funds worth $4.5 billion were raised by PE firms. The total size of the funds raised during 2007 calendar year stood at $8.4 billion, according to a study by Venture Intelligence, a firm that tracks private equity and venture capital in India. […]
Nusli Wadia Group is set to buy Groupe Danone`s 50% stake in biscuit major Britannia Industries with a committed USD 200 million funding from ICICI Bank, reports Economic Times. The group will buy Danone`s 50% equity in the UK incorporated holding company, Associated Biscuits International Holding (ABIH), backed by a five-year loan. The deal will end two-year-old acrimonious shareholder dispute between Wadias and Danone, with the French food giant walking out of a decade-long joint venture to chart independent course in India. ABIH will remain as Britannia`s holding entity after the transaction. ABIH holds 50.9% stake in India`s leading biscuit company by value. […]
The uncertain future of the equity market seems to be paving the way for newer invesment opportunities. Private equity (PE) players have been quick to recognise these. Of late, their appetite seems to have shifted from the most-talked about sectors like real estate and financial services, which were the flavour of the season till some time ago, to sectors like education, healthcare, defence, logistics, warehousing and infrastructure. These not-so-talked-about sectors are now attracting big private equity players. Though some of these are the very basic sectors of the economy, it is only recently that investment interest has found a place in them. […]
Private equity firms had raised piles of capital when the going was good, but thanks to the global credit crisis, many of these firms are finding an increasing number of investors who aren’t honouring their capital commitments. While raising capital, private equity funds get commitments from investors such as pension funds, university endowments, hedge funds, fund of funds and high net-worth individuals. These commitments are drawn down as and when the fund makes an investment. This means that till the capital is deployed, its control rests with the investors, collectively referred to as limited partners (LPs). Because of the huge erosion in the market value of their fixed income and equity exposure, many of these LPs, especially the pension funds and endowments, could suddenly find themselves overexposed to private equity, an asset class that is not marked to market. If they decide to reallocate assets, private equity funds may find themselves in a situation they last faced during the dotcom bust, when many LPs pulled out and funds were left with little capital to “draw down”. Another problem could arise from hedge funds or institutions who have been taken over by larger institutions. […]
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