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January was an unusual month. Despite the market crash and battered valuations thereafter, deal makers had a hectic schedule. January recorded the maximum number of mergers & acquisitions (M&A) and private equity (PE) deals — the highest-ever in a single month in India. Strategic investors and PE funds were striking a deal every six hours, totalling 116 deals worth $5 billion. The previous high was in January 2007 when there were 101 deals announced in a single month. In January 2008, according to the latest dealtracker from advisory firm Grant Thornton, there were 56 M&A deals worth $3.01 billion and 60 PE deals worth $2.05 billion. In volume terms, this was the biggest month for PE funds in India. For PE deals too, the previous best was in January last year when 56 deals were announced. This had come down later during the year with an annual average of 33 PE deals per month during 2007. Grant Thornton corporate advisory services partner CG Srividya says: “A lot of the deals announced in January would have actually been closed by December itself. Moreover, if we look at the stock market correction, it has not led to total collapse of all sectors, some have been affected less than others. Many PE funds were waiting for a correction to enter the market and the fall would lead at least some promoters to have realistic expectations. In fact, there could be a positive spin-off for PE deals because of the correction.” […]
Venture capitalists invested some $928 million in 80 deals for entrepreneurial companies in India during 2007, according to the Quarterly India Venture Capital Report published today by Dow Jones VentureSource. This was a whopping 166% increase over the $349 million invested in 36 deals in 2006 and easily the highest total on record for the region. The report found nearly 48% of all venture financing deals in India were for Information Technology (IT) companies, as 38 rounds were completed, accounting for $384 million, more than India's entire 2006 venture investment total. The most popular recipients of venture capital in the IT industry were companies in the Web-heavy “information services” sector, which accounted for 22 deals and nearly $141 million in investment. Among the deals in this area was the $10 million second round for Bangalore-based Four Interactive, an online provider of local information on food, events, lifestyle, shopping and more. […]
As a fallout of the Emaar MGF Ltd share sale that was withdrawn earlier this month after investors stayed away, the private equity arm of Citigroup Inc., which was an investor in the company, has had to abort a proposed sale of Rs325 crore worth of Emaar MGF shares to DE Shaw, an investment firm. Citigroup would have likely gained Rs200 crore from the deal. Citigroup’s stake in real estate developer Emaar MGF was through its subsidiary Citi Venture Capital International. Its deal with DE Shaw was contingent on the initial public offering (IPO) going through with the transfer of shares to be made at the issue price, according to the offer document filed by Emaar MGF with stock market regulator Securities and Exchange Board of India. Confirming that the deal has been cancelled, Ajay Relan, managing partner (regional head, India) of Citi Venture Capital International, a private equity arm of Citigroup, said: “We will now wait till the IPO,” implying a second attempt at fund-raising by Emaar MGF, which has said it will look to raise money when the situation in the market improves. […]
Anil Ambani-led Reliance Communications on Thursday said the company has acquired Uganda-based Anupam Global Soft, a company holding telecom service provider licence in the African country. RComm also announced an investment of about Rs 2,000 crore over the next five years to set up telecom network in Uganda. RComm is planning to offer mobile, fixed line, internet, national and international long distance services, in addition to Wi-Max and Wi-Fi services in Uganda through the newly acquired company, a statement from the company said. Anupam Global Soft holds licences for providing public infrastructure and public services, issued by Uganda Communications Commission. The company has received spectrum and plans to launch mobile services by 2008-end. “RComm is targeting to invest up to $500 million (about Rs 2,000 crore) in establishing a high quality integrated telecom network in Uganda to capture the significant growth potential in the emerging African market,” the release said. Uganda has a population of about 30 million and in March 2007 about 10% of this population was using mobile phones. […]
Mauritius-based private equity funds Monsoon India Inflection and Jackson Heights Investments have picked up a 3.35% stake in the Gurgaon-based Acme Tele Power for Rs 400 crore. The deal pegs the valuation of Acme, which manufactures and supplies energy conservation solutions for telcos, at around Rs 11,940 crore (just under $3 billion). This marks the second round of private placements in Acme. Last year, Acme had offloaded a 1.66% stake in the company to three PE firms – DB International, Earthstone Holdings and Kotak Mahindra Capital – for Rs 197 crore. Acme Tele Power’s promoter and managing director Manoj Upadhyay confirmed the development and said this would the final private placement before the company’s plans to tap capital market. The proposed IPO will see Acme’s promoters offer about 17.3 million shares for sale which will reduce the promoters’ stake to 84.6% from the current 94.7%. The company has already filed a draft red herring prospects (DHRP) with Sebi for its float. […]
Foseco India sold 20% stake in the company to Cookson Group Plc. for about Rs 536.4 million through an open offer. Cookson Group Plc has bought 1,277,292 equity shares, representing around 20% stake in Foseco India, at a price of Rs 420 a share. Following the acquisition of 20% stake in Foseco, the shareholding of the public in the firm stands at 13.52%. Prior to the public offer, the public shareholding stood at 33.52%.(My Iris) […]
In order to strengthen its existence in insurance, banking and financial services segment, India’s fifth-biggest IT services company, HCL Technologies has acquired US-based Capital Stream, an IT solutions supplier for lending and straight-through processing for banks and finance companies. HCL has acquired Capital Stream in an all cash deal of about USD 40 million (Rs 160 crore). Ram Krishnan, corporate vice-president at HCL Technologies, told, “Financial lending has always been our focus and we have been trying to acquire capabilities to provide solutions in the commercial lending processes. This acquisition provides us that capability.” The recent deal will improve HCL’s capacity to offer end-to-end solutions via product and multi delivery capability to commercial as well as retail financial institutions. […]
Anil Ambani group company Reliance Communications is understood to have acquired an African company for close to $500 million (over Rs 2,000 crore), through which it plans to offer telecom access services in Uganda. This is the third global acquisition for the company after FLAG in 2003 and Yipes in 2007, and first international acquisition as far as services are concerned. According to industry sources, the acquisition agreement is believed to have been agreed upon late last evening in London and the total deal size is likely to be higher than the $211 million for FLAG and $300 million for Yipes. Formalities of completing the acquisition are expected to be completed during the day. Reliance has recently been allowed to offer GSM technology based mobile services in India along with its existing CDMA operations through out the country. […]
Nonresident Indian steel tycoon Lakshmi Mittal and Indian refiner Essar Oil are among four companies making preparations to buy a 50% equity stake in Prize Petroleum, a subsidiary of state-run Hindustan Petroleum Corp. Ltd. Prize operates three small fields in western India and is considering a rights issue to fund its expansion. “Mittal Energy, Essar Oil, Larsen & Toubro, and Jaiprakash Associates are all doing due diligence for buying up the 50% stake of financial institutions in Prize Petroleum,” said Hindustan Petroleum Chairman Arun Balakrishnan. ICICI Bank, India's second largest lending institution, owns 45% of Prize Petroleum's equity, while mortgage firm Housing Development Finance Corp. holds the remaining 5%. Balakrishnan said his company was not interested in investing further in the explorer. […]
There is now on the ground evidence of gulf interest in the Indian equity markets. It is not just about private equity or secondary markets, gulf investors are looking at direct participation by picking up stakes in retail brokerage houses like Angel Broking and Sharekhan. NDTV has learnt that Angel Broking is making a second placement of equity and there are some new entrants in the running. In its second placement, Angel Broking will raise Rs 250 crore while the first placement last year to IFC for 12.5 per cent was done at Rs 150 crore. “We will be placing a second round of equity by the end of the year. This will be to finance the margin trading business that we are going to get into. For the first time we have seen interest from gulf investors coming in to pick up the stake and we in talks with several people,” said Dilip Thakker, Chairman, Angel Broking. […]
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