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State Bank of India (SBI), India's largest bank, said it has bought a 91 pct stake in Global Trade Finance Ltd (GTF), trade finance solutions provider, without mentioning the size of the deal. The bank — 59.7 pct-owned by the Indian government — said it has executed a share-purchase agreement with Exim Bank, FIM Bank Malta and International Finance Corp (IFC), the World Bank's private sector lending arm, to acquire their holdings in GTF. On Jan 24, the company said it intended to buy the stake for about 5.2 bln rupees. EXIM holds 40 pct of GTF while the Washington-based IFC holds 12.5 pct, FIM Bank has a 38.5 pct stake and India's state-run Bank of Maharashtra owns the remaining 9 pct. GTF reported a net profit of 288.7 mln rupees in 2007, a rise of 171 pct year-on-year. ( Forbes) […]
In spite of attractive valuations this year, Private Investment in Public Equity (PIPE) deals are increasingly falling out of favour as most deals sealed in this calendar year are in unlisted or privately held companies. Out of the 87 private equity deals that were struck in the first two months of this calendar year, only 10 were in listed companies. While some experts have been saying that there will be more PIPE deals as stock prices are now attractive, the numbers tell a different story. “At least for the first quarter of this year and the second quarter to some extent, PIPE deals will be impacted depending on how market conditions pan out,” says Arun Natarajan, founder and CEO of Venture Intelligence, a private equity and venture capital monitoring firm […]
Tata Motors will buy luxury brands Jaguar and Land Rover from Ford Motor for $2.3 bn in cash. The purchase price is less than half of what Ford had paid for the two brands as demand for luxury vehicles has dropped the world over. The acquisition is the largest ever by an Indian company in the automobile space. Ford will pay about $600 mn to the Jaguar Land Rover pension funds, the two companies said in a joint statement today. Ford had bought Jaguar in 1989 for $2.5 bn while Land Rover was bought from BMW for $2.5 bn in 2000. The transfer of ownership to Tata Motors is expected to close by the end of the next quarter, subject to regulatory approvals. “We have enormous respect for the two brands and will endeavour to preserve and build on their heritage and competitiveness, keeping their identities intact,” Tata Motors Chairman Ratan Tata said. Alongwith the two brands the deal will involve acquisition of plants and Intellectual Property Rights (IPR) held by the two brands. Tata Motors did not mention the mode of financing the deal, but sources familiar with the developments said it would be done mainly through bridge financing from a clutch of banks, including JP Morgan, Citigroup and State Bank of India (SBI). The company is raising Rs 4,000 crore through issue of securities in the foreign and domestic market in one or more tranches […]
Electric car manufacturer Reva Electric Car Co. Pvt. Ltd breathes easier in five states—its users don’t have to pay road taxes on electric vehicles in states such as Andhra Pradesh, Karnataka and Rajasthan. In others, buyers of the electric car still have to shell out money that varies from an annual Rs5,000 to up to 9% of the purchase price. While a few states grant such exemptions towards non-polluting vehicles, “there is no uniform long-term policy in place,” rues Chetan Maini, deputy chairman and chief technology officer, Reva. The Bangalore-based company, funded by Draper Fisher Jurvetson (DFJ) and Global Environment Fund, today exports some seven of 10 Reva-branded cars to other markets where regulations are friendlier towards environmentally “clean” transport, but would like India to be a larger market. It has been lobbying for government subsidies and exemption on road tax, value-added tax and excise duty, among other levies, by talking to the various ministries and government departments at both the state and national level. […]
A tightening of global liquidity markets has made private equity fund raising for the real estate and infrastructure sectors difficult with many funds expected to extend their closures or reduce the target corpus. According to people in the industry, the churn in the global equity markets has made investors wary of even private equity funds, although the two markets are in different categories with different quantum of risks. […]
The Indian outsourcing sector is amongst the worst hit by the rising rupee with most of the companies showing a slump in growth and profitability. Valuations too have fallen. However, this situation not only reflects the ‘deteriorated revenue growth expectation’ of investors, but also makes the domestic BPO (business process outsourcing) space ripe for heightened M&A (merger and acquisition) activity. […]
Lehman Brothers and Deutsche Bank are set to make a combined investment of $500 million in an SPV floated by India’s second-most valued real estate developer Unitech, according to a person close to the development. The two PE players are learnt to be in advanced talks with Unitech to pick up a minority stake in the SPV formed to execute two commercial projects in Mumbai. The two projects, located in Santa Cruz, are likely to have a combined developable office space of 2 million sq ft. The deal is likely to be closed in the next three weeks, according to a source. Unitech declined comment on the issue. […]
Red Fort Capital, the investment manager of Cayman Islands-based Red Fort India Real Estate Fund I, is planning to launch a second offshore fund next month with a corpus of Rs 3,200 crore ($800 million) to invest in the Indian real estate. The fund will be named Red Fort India Real Estate Fund II and is expected to close in June this year. Red Fort is targeting individual investors, corporate entities, pension funds, insurance companies, foundations, endowments and governments in Europe, the US and other countries, according to Subhash Bedi, partner, Red Fort Capital. The fund will invest in FDI-compliant projects in the residential, commercial, retail and hospitality sectors and has an investment threshold of Rs 40 crore ($10 million). ‘’We are expecting returns of 30 per cent,’’ Bedi said. […]
Nalanda India has picked up a 5.25% stake in US-listed BPO firm WNS (Holdings). The fund acquired 2.2 million shares of the BPO firm, which is listed on the NYSE, according to an SEC filing by WNS. Though the transaction size was not disclosed, going by the scrip price on March 14-the day of the transaction- the deal value would be about $32-34 million. The BPO firm has a market cap of $667.6 million and is majority owned by Warburg Pincus. Institutional investment, including that by asset management firm Fidelity Management & Research and Tiger Management, in WNS totals 38.01%. […]
Irish building materials group CRH on Thursday announced the acquisition of a 50% stake in Hyderabad-based cement company, My Home Industries (MHIL) for 290 million euros (Rs 1,840 crore). Promoted by J Rameswar Rao, closely-held MHIL operates three cement plants in Andhra Pradesh’s Nalgonda district with a total capacity of 3.2 million tonnes (MT). CRH and the existing owners will jointly manage MHIL with equal board and management representation. The transaction is expected to be completed in the second quarter of 2008. Production capacity will rise to 4.2 MT once the grinding plant under construction near Visakhapatnam is completed in early 2009, according to a CRH statement. “MHIL is one of the most modern cement producers in India with excellent reserves and a strong management team and is a market leader in the dynamic Andhra Pradesh market. […]
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