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Private equity firms Blackstone and Primus Capital Partners are in the race to pick up a minority stake in Hinduja Foundries, the Economic Times reported. Hinduja Foundries is the new name for the almost six decades-old Ennore Foundries Ltd, part of the diversified Hinduja Group. The Hinduja Group decided to sell close to 10 pct of its current 80 pct equity holding in the foundry unit to raise about 80-100 mln usd, the report added. The funds will be used to part-finance its proposed capacity expansion plan and for overseas acquisitions. […]
Export Development Canada (EDC) is investing $50 million, its largest single equity investment to date, in a proposed $1 billion infrastructure fund in India to provide Canadian companies with new opportunities to participate in major projects i n the booming Asian market. EDC is Canada's export credit agency, which provides financing and risk management services to exporters and investors. The IDFC-sponsored India Infrastructure Fund will invest in infrastructure projects involving energy and utilities, transportation, t elecommunications and social infrastructure in India and will be managed by IDFC Project Equity Company Ltd. […]
Apparently hit by poor market sentiment, India has seen at least 14 major private equity deals fall through in the last three months with three big ones falling through in the last 30 days. The total number of private equity deals in February 2008 was 55 per cent lower than in January 2008. With the market in doldrums and valuation of companies looking stretched, financiers are walking away from deals struck in the better days of December. Hitesh Agrawal, who heads the equity research at Mumbai-based brokerage firm, Angel Broking said, “Globally, there is a liquidity crunch. In a post-sub-prime scenario, private equity players are more answerable to their investors, making it tough for a fund manager to select his investments and at the correct valuation.” […]
Sarovar Hotels and Resorts, the multi-brand hotel management company, is in talks with strategic investors to raise about Rs 75-100 crore to fund its expansion plans. The company hopes to conclude a private placement of about 10 per cent of stake in three to six months. Sarovar Hotels is India’s largest chain of hotels operating in the mid-market segment. It operates 36 properties in India including, Hometel, and three, four and five-star hotels under the Sarovar brand, and is also the master franchiser for Carlson Hospitality Worldwide’s Park Plaza and Park Inn brands. It has around 33 properties under various stages of development, which will all come up in about three years. […]
The sharp correction in prices of listed equities has already had its impact in the private equity space. A few large deals have fallen through since the market crash, with the most noteworthy being ICICI Ventures’ plan to invest $800 million (Rs3,240 crore) in Jaypee Infratech Ltd for a 10-15% stake. Earlier, Indivision India Partners, the private equity fund of the Future Group, called off a Rs250 crore deal with Zee group’s Dish TV. By and large, private equity deals have fallen through because investors toned down their valuation estimates in line with the drop in prices of listed peers, while promoters stuck to earlier estimates, based on the assumption that the fall in the stock markets is only a temporary phenomenon that will correct over time. […]
Promethean India, AIM-listed investment firm, is learnt to have picked a minority stake in the Oberoi Group’s listed hospitality arm EIH Ltd. According to sources, Promethean, which had picked less than 5% stake through the secondary market route, is looking to buy additional shares in the firm. EIH is the second most valued hospitality firm in India by market capitalisation after the Tatas’ Indian Hotels. EIH Ltd has a market capitalisation of Rs 6,000 crore. Promethean has invested in three other companies out of its $115-million fund raised last year. These include 8.5% stake in public-listed Nitco Tiles, which was again through open market purchases. While promoters did not dilute their stake, one of the co-founders of Promethean India Gaurav Burman was inducted in the board of the building material manufacturing company. According to sources in the merchant banking industry, Promethean had picked a small stake in EIH through the open market. This could be between 1% and 5% and the firm is now considering to hike it further. However, it is not known how much stake Promethean would finally hold in EIH. […]
The news of Asia’s oldest stock exchange acquiring a substantial stake in the Ahmedabad-based National Multi Commodity Exchange (NMCE) may have come as a surprise to many. To those in the know, it was a pure financial move by the Bombay Stock Exchange (BSE) in that it may prove to be a multi-bagger going forward when some financial bigwigs enter the commodity arena. Recently, the BSE bought a 26% stake in NMCE for an undisclosed amount of money. People familiar with the deal say that the stock exchange had to shell out around Rs 40 crore for the stake, valuing the comex at around Rs 150 crore. “BSE is of the firm belief that going ahead, others would be interested in acquiring a stake in NMCE. At that time, it would have an option of diluting a part of its stake and that too at a premium,” says a source. It is clear that the stock exchange would not be involved in the daily working of the comex. BSE members would also not be automatically eligible for NMCE memberships. They would have to submit a request to the Forward Markets Commission (FMC). […]
Indian textile firm Textile Alok Industries Ltd has taken a 50% stake in Ashford Infotech, a part of the Ashford Group, for the joint development of real estate projects. It has acquired the stake through wholly owned subsidiary Alok Infrastructure, it told the Bombay Stock Exchange. The venture has already purchased the Bhandup land of tyre maker Ceat Ltd, measuring around 6.92 acres for around INR1.30bn (US$30m) as its first property development. According to a report today (13 March) by news agency Reuters, the JV will build a number of offices and set up a 183-acre textile special economic zone in Silvassa.(Just Style) […]
An investment arm of global private equity firm Warburg Pincus Llc. plans to sell a portion of its equity stake in DB Corp. Ltd, which owns India’s second largest Hindi daily Dainik Bhaskar, less than two years after it first invested in the company. Cliffrose Investment Ltd, the Mauritius-registered affiliate of Warburg Pincus, is planning to sell only to a so-called third party, or one not associated with the promoters of DB Corp., before the company goes for a proposed sale of shares to the public. Cliffrose, which currently holds a 7.14% stake in DB Corp., has said this in a letter to the company. This information is present in the filing DB Corp. has made to India’s stock market regulator Securities and Exchange Board of India, or Sebi, in the run-up to an initial public offering (IPO) of shares. It’s not unusual for private equity firms to cash out of investments ahead of a share sale or even after it, either to make good on their gains, or hedge their bets should the market turn weak. “Such a move does raise the question of why an existing investor wants to sell out if the future of the company is bright. However, I don’t think it’ll have much of an impact. At the end of the day, it all boils down to the price band, or at what valuation the IPO is being offered. If the firm’s fundamentals are strong, just because a foreign investor sold a bit of their stake, the IPO is not going to be adversely impacted,” said Hitesh Agrawal, head of research, Angel Broking Ltd. […]
Sometime last year, the monetary policy authority wrote to the Government and the capital markets regulator indicating its uneasiness with private equity flows. In the overall hierarchy of flows, the Central bank places private equity well below other forms of capital such as remittances and foreign direct investment. In fact, it has said that the classification of private equity flows would have to be looked at closely considering that in some cases, investors had exited quickly without staying on even for the medium term. These concerns and estimates of private equity investments topping $10 billion in 2007 had prompted the Government to write to SEBI. The finance ministry wanted the regulator to collect data relating to investments by private equity funds and based on that, to ascertain whether there were any regulatory concerns. The aim was to revisit the issue after an analysis. But private equity fund managers here who were fretting at the thought of being policed, need not worry at least in the near term. For, the capital markets regulator has made it clear that it is not equipped to collect the data on private equity. Rather, the Central bank, which monitors all inflows and outflows, is far better positioned to carry out this task, it has said. Since private equity could come in several forms, such as through foreign venture capital funds, it has been suggested that the RBI could be mandated to track these flows. […]
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