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Worried that real estate developers will not be able to complete projects in time in a market where demand is slowing and credit is becoming tighter, private equity firms that invest in such projects have increasingly started doing so in phases or instalments. “The problem in investing at one time is that you don’t really have any link to progress in the project you have invested in,” says Aashish Kalra, managing director of the New York-based, India-focused real estate fund, Trikona Capital Ltd. “Funding should always be performance linked.” Private equity firms are a preferred source of funds for developers who are finding it increasingly difficult to raise money from banks or retail investors. And the cost of debt has increased to around 16-18% a year. […]
The rising cost of capital may stall crucial infrastructure projects and hold back private equity (PE) funds worried about their valuations, exposing other industries to the risk of an investment slowdown as well, PE managers say. Infrastructure companies such as power project developers accounted for more than 32% of all PE-funded deals in the country last year and 37% through the first half of this year. India needs investment worth tens of billions of dollars to reinforce its deficient public works, such as power plants, roads, ports and airports, to sustain economic growth. Debt capital costs have increased for infrastructure companies in a regime of rising interest rates. Developers who fear they wouldn’t be able to service higher-cost debt may put borrowing plans on hold, delaying the execution of their projects, and in turn, lowering their equity valuations. […]
As the tides of investments change over time, venture capital (VC) funds are shifting their focus to businesses related to consumer demand such as education, media and entertainment, food & beverages and alternative energy. This focus assumes significance as it was till six months ago that technology was the prime investment target of VC funds. Recently, Matrix Partners India invested $7 million in pre-school educator Tree House Education and Accessories and Helion Venture Partners invested $4 million in Humming Bird Suites, a Bangalore-based service apartment operator.VC funds are raising more funds and entering into newer deals. Despite the slowdown in the economy, the industry has made 20-25 investments in each quarter. […]
Global Holdings Company (GHC), the holding company of telecom firms GTL and GTL Infrastructure, is in talks to acquire Mumbai-based Indmar Aviation Services Company for an undisclosed amount. The deal is expected to be concluded within the next 15-20 days. Global Projects and Aviations, a subsidiary of Global Holdings Company (GHC), will be the designated company to acquire Indmar, sources close to the development said. Cash-strapped Indmar, which provides maintenance and repair services to general aviation, was in talks with investors for fund-raising. […]
Construction firm Gammon India on Wednesday announced the acquisition of a 50% stake in Italy-based power firm Sofinter for an undisclosed sum. The deal is Gammon’s third acquisition in the Italian market this year. In a regulatory filing, Gammon has informed BSE that its step-down offshore subsidiary has acquired 50% equity of Sofinter, the holding company of Ansaldo Caldaie, one of the major power equipment supplier in Italy. Though Gammon did not disclose the deal size, a source close to the development said it’s around $70 million. The deal would also help Gammon to consolidate its presence in Indian power sector as Ansaldo Caldaie Boilder — the Indian subsidiary of Ansaldo Caldaie — has begun operations. […]
A. Little. World. Private Limited (“ALW”), leveraging new generation technologies to enable financial inclusion at the bottom of the pyramid (BOP), announced the closing of INR 287.4 Million in sries B funding led by Bellwether Microfinance Fund Pvt. Ltd. and India Financial Inclusion Fund, both managed by Hyderabad-based caspian advisors. Legatum Ventures, which led the Series A investment in ALW, also invested in the new round. These investments, facilitated by Intellecap, will help the Company achieve its ambitious growth plans to set up a technology-driven 'Bank-in-a-Box' in every village and facilitate rural India's integration into the mainstream financial sector. The investment will also enable ALW to improve capacity and build its product portfolio. […]
TravelPort Holidays (India) Pvt Ltd, a Mumbai-based online travel agency, is in talks with private equity players to raise funds for its offline and online expansion to tap the domestic travel industry, which is poised for significant growth in the coming years. Heena Akkhtar, chief operating officer, TravelPort, told DNA Money that the company is raising funds through private placement. “We are currently in the process of fine-tuning the funding arrangement with one of the PE firms. So, concrete details cannot be disclosed at this stage,” she said. TravelPort expects to close the deal in another couple of months. While valuation details are being worked out, industry sources said the company is looking at diluting 10-20% stake. “The money to be raised could be anything between Rs 15 crore and Rs 20 crore,” said the source. […]
The race to induct a strategic partner in Tata Teleservices (TTSL) seems to have narrowed down to Japan’s NTT DoCoMo and European telecom giant France Telecom. The Tata Group is close to diluting its stake for around Rs 5,000 crore in the country’s sixth-largest telecom operator, industry sources told ET . “Talks are in the final stage and a deal is expected to be announced in the next two months,” informed sources said. One industry source with knowledge of the matter said NTT DoCoMo might be the front-runner. This, however, could not be independently confirmed. Both companies have put in bids. It’s not clear when a formal announcement would be made. It is also not clear as to the exact stake which the partner will pick up. The figure of Rs 5,000 crore assumes a stake sale in the region of 12%. However, a number of industry sources following the transaction said the bids were for a 26% holding, involving a pay-out (for the investor) of around Rs 10,000 crore. […]
Tata Group company, Tata Communications on Monday said it has invested $11.5 million in a next generation content delivery network (CDN) company BitGravity. A company statement said Tata Communications entered into a strategic partnership with BitGravity and invested USD 11.5 million in convertible debt of BitGravity. With the strategic tie up, the company launches CDN services including high quality content and video. (ET) […]
Three global alcohol beverage firms, including world's largest spirits firm Diageo, have evinced interest for a strategic stake in the Rs 3,200-crore United Spirits, the spirits arm of the UB Group. UB Group Chairman Vijay Mallya talking to the media in Bangalore on Wednesday on the sidelines of United Breweries AGM, said that there is serious interest from at least three global players who are in discussions with him to pick up stake in United Spirits. “The interest is of strategic nature. We have a strong distribution network in India and global players wanting to enter India are keen on this. In turn, we will look to leverage our partners' global network for an international footprint. The talks, including with Diageo, are on,” he said, declining to outline a timeframe for this strategic move. […]
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