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Logistic sector is the new favourite of private equity (PE) as Blackstone, IDFC, Reliance Capital are busy signing deals and acquiring stakes across logistics companies. Moreover, firms like Biyani's Future Capital and ICICI Ventures are also busy launching dedicated funds for investing in logistics. Future Capital's logistics fund worth $700 million to $1 billion will set up warehouses across India and ICICI Ventures' new fund of $3 billion is setting aside money for logistics companies. According to a report by Venture Intelligence, the investments in shipping and logistics accounted for 22 per cent of total deals by number and 11 per cent of the deal value in 2006-07. “There is a big demand for infrastructural development and transport is an integral part of it and returns too are good,” said Luis Miranda, President & CEO, IDFC Private Equity Co Ltd. […]
Global equity companies have no plans to put their money in the Indian aviation industry even though the carriers are seeking $2.5 billion in cash for expansion. “We certainly would be looking to invest in airlines in India but we would like to wait and watch. The first round of consolidation for the industry is over and now we have three dominant players, which is great. We will wait to see how the benefits of merger, route rationalization and international operations shape up the airlines in India and when they would start showing stronger operational numbers, which is not happening right now,” said TPG Managing Director Puneet Bhatia. The Group has made investments into Asia-Pacific aviation of late, but Bhatia refused to give the details. He said the group would be looking to invest into large established players. […]
The near-shutdown in the market for initial public offerings (IPOs) this year will generate opportunities for funds investing in early-stage companies, a veteran Asia investor said Tuesday, as companies seek alternative sources of capital. While it takes time for unlisted firms to rein in valuation expectations after the long bull run, Baring Private Equity Partners chief executive Jean Eric Salata said the climate for making attractive growth capital investments is ripening as competition wanes. “The IPO markets are dormant right now, so taking companies public is challenging, but for us that’s really a pretty big opportunity,” said Salata, whose firm manages around $2.5 billion (Rs10,125 crore) and focuses on taking stakes in early-stage firms. […]
PNB Housing Finance Ltd, housing finance arm of Punjab National Bank, is in talks with some companies, including Standard Chartered, to divest up to 26 per cent stake. “We are examining the possibility of roping in a strategic partner or private equity firm as part of unlocking value,” PNB Housing Finance Managing Director V K Khanna said. The decision in this regard would be taken by June, he said. According to sources, Standard Chartered along with other companies is in talks with the housing finance firm to pick up stakes. However, there was no confirmation from PNB Housing Finance about Standard Chartered's interest in the company. PNB Housing Finance needs capital for scaling up operation, he said, adding that the fund has to come from either strategic investors or capital market. […]
One of the world’s largest investment banking firms, Goldman Sachs, is picking up a 20% stake in Chennai-based Shriram Credit for Rs 300 crore, making an indirect entry into equity and commodity brokerage business in India. Shriram Credit is a non-banking finance company (NBFC) under the south India-based Shriram Group, which is engaged in lending activities. The Indian group is transferring its brokerage and distribution services business to Shriram Credit and bringing in Goldman Sachs as a significant minority partner. The deal values the firm at Rs 1,500 crore ($375 million). Goldman Sachs is routing the deal through its 100% Mauritius-based subsidiary GS Strategic Investments. This is one of Goldman Sachs’ major strategic moves after it broke ties with the Kotak Mahindra Group in 2006. The US-based investment banking firm has been present in India through its I-banking unit and has also been an active player in the private equity space. The partnership with Shriram Credit would allow Goldman entry into the brokerage and lending business. […]
Future Capital Holdings (FCH), the financial services arm of the Future Group, has invested Rs 100 crore in two subsidiaries of Centrum Capital, which is into foreign exchange and wealth management businesses. FCH will invest Rs 75 crore into Centrum Direct, engaged in foreign exchange money changing business, for a 50.1 per cent stake. FCH will also invest Rs 25 crore into a new joint venture company, Centrum Wealth Managers, for a 50.1 per cent stake. Centrum Capital’s existing retail broking, portfolio management and financial products distribution businesses will be moved into Centrum Wealth Managers, FCH said. With the acquisition, FCH has gained access to the 68 strong branch network and over 5,00,000 Centrum customers in the fast growing foreign exchange and wealth management businesses. […]
PE firms have invested Rs 4,000 crore ($1 billion) in small and medium enterprises (SMEs) in 2007-08 , an increase of 75% from the previous year. Pharmaceutical, infrastructure , transportation and manufacturing attracted most PE funds among the SMEs in the current financial year. Sunrise sector IT, which used to be a big draw for the PE funds, has lost its predominant position, according to a data compiled by Federation of Indian Micro and Small & Medium Enterprises (FISME). As per the estimates of FISME, the potential market for PE funding in Indian SMEs is worth Rs 20,000 crore ($5 billion). The average size of the deals during FY’ 08 was pegged between $12 million and $15 million. Says FISME secretary general Anil Bhardwaj, “Indian SMEs are growing at a rate of 30% year-on-year .” […]
Helion Venture Partners, an India-focussed venture fund, on Tuesday announced the closing of its second fund of $210 million. The company had raised its first fund of $140 million during late 2006. Helion also announced that it would now expand its focus sectors to include companies in the consumer services space. This would include high-potential companies in sectors like retail services, education and financial services. “Helion will continue its focus on technology-powered businesses even as we expand our focus into consumer services. Factors like the rapid increase in mobile and Internet penetration in India are further paving the way for innovative technology products and services that to cater to the domestic market. In addition, domain-focused outsourcing and technology products continue to be focus sectors,” said Ashish Gupta, managing director, Helion Venture Partners. […]
Piramal group firm Indiareit Fund Advisors Pvt Ltd plans to raise up to $800 million through a second global fund before April, a top official said on Tuesday. UK’s 3i has already committed $250 million to the fund which will invest in the Indian real estate sector, he said at a conference to launch the group’s new corporate identity. “Since it is a global fund … we need approvals to launch in different countries,” said group chairman, Ajay Piramal. “It should not be more than April, I guess.” Indiareit currently manages about $450 million raised through two series of funds in the domestic market and one in the overseas market. Separately, he added analysts had valued the pipeline of drugs under development at the research entity, which was recently spun off from group flagship Nicholas Piramal India Ltd at $480 million to $540 million. The research unit, to be called Piramal Life Sciences Ltd, is expected to be listed on the stock exchange by June. Piramal has said the founders could dilute about 10% stake in the research unit to private equity players or strategic investors, including international drug companies, over the next 12 months. Top Indian firms including Dr Reddy’s, Sun Pharmaceutical Industries and Ranbaxy have chosen to spin off their research into separate units to help lower risk from high drug development costs and unlock value. Piramal group has decided to bring all its group companies under the Piramal brand name, subject to shareholder and central government approvals. Flagship Nicholas Piramal India will be renamed Piramal Healthcare Ltd and Gujarat Glass Ltd will now be Piramal Glass 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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