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India's realty industry will grow at a fast clip of 30 percent over the next 10 years, offer 20-25 percent returns and secure foreign investment worth $30 billion, says a study by a leading industry lobby. 'The total size of investments in the domestic real estate sector is likely to be $102 billion,' says the study released Sunday by the Associated Chambers of Commerce and Industry of India (Assocham). 'At present, the domestic real estate market is expected to be $14 billion, in which the foreign direct investment contribution is estimated to be at $5-5.5 billion,' the study adds. 'The only problem that the real estate sector is currently confronting is with approvals for setting up townships, as a number of central and state agencies are involved,' said chamber president Venugopal N. Dhoot. […]
Tano Capital, LLC, a global alternative assets firm, has invested $15 million in Mumbai-based ABG Motors, a newly created arm of ABG Engineering & Construction, through its affiliate in a private equity transaction. ABG Motors is part of India’s largest private sector ship builder, ABG Shipyards, which is owned by entrepreneur Rishi Agarwal. ABG Motors applied the $15 million investment towards its $37 million acquisition of Cemp, an Italian manufacturer of flameproof electric motors. ABG Motors will also use some of the proceeds to finance a manufacturing facility for Cemp in Bangalore. The Italian acquisition is partly leveraged with debt coming from Italy’s Interbanker. The deal is unique in that Tano Capital acted both as a private equity investor and as a merchant banker. Tano Capital originated the proposal to form a private company in India to acquire Cemp, marketed the proposal to ABG Engineering and invested $15 million of its own funds in the deal. Carlton Pereira, Managing Director of Tano India Advisors, stated, “We identified the opportunity using our network in Italy’s private equity and advisory community. And we took the deal to ABG. It was a proprietary deal, and we took a major role in effecting the acquisition.” The sellers of Cemp were Italian private equity funds. ABG Motors acquired virtually 100% of Cemp; Cemp’s existing management team has retained a small minority stake. […]
The government is likely to allow private equity (PE) funds and venture capitalists (VCs) to be part of the consortia that bid for infrastructure projects. At present, these entities can only participate indirectly in these projects by committing funds to one of the bidders. “Given that financing of the infrastructure sector is essential to sustain the growth story, the move to enable PE/VC funds to invest in these projects is in the right direction,” said a finance ministry source. Sebi-registered VC funds and PE firms are barred from bidding for infrastructure projects, as they do not meet conventional qualifications like gross revenue, net worth or net cash accruals. The move is in line with the recommendations of the infrastructure finance committee headed by Deepak Parekh. The Centre is understood to have agreed in principle to the proposal and is examining the impact. The move would encourage these investors to participate at the inception stage, the source added. […]
Goldman Sachs, Wachovia Bank and Bayer Capital have together acquired about 9% stake in Gurgaon-based real estate firm Vatika group for about $250 million. The fund infusion into the group from the three investors will be complete by March, 2008. Vatika group also plans to hit the capital markets with an IPO early next year. The company will use proceeds from the PE placement and the IPO to part finance its ongoing development plans. The company has recently undertaken a 1200-acre integrated township project in Jaipur and is developing about 3.8 million square feet of residential projects in Gurgaon. Vatika Group has also got a board of approvals’ (BoA) clearance for developing a 53-acre IT special economic zone as part of its Jaipur township. […]
Small and mid-size pharma companies focused on outsourcing seem to have caught the attention of investors, if the recent investments by private equity (PE) players in the sector are any indication. PE firms such as ICICI Venture, Citi Venture Group and Sequoia Capital have put their money in upcoming pharma units that are focussed on outsourcing. Sequoia Capital on Wednesday invested Rs 100 crore in Hyderabad-based pharma and biotech research firm GVK Biosciences. Earlier, the PE firm had also picked up around 18% stake in clinical research firm Sai Advantium for around Rs 50 crore. Two other clinical research firms Radiant Research and SIRO Clinpharm have also received PE fund infusement from ICICI, 3i and Kotak, respectively, earlier this year. Says Sequoia Capital MD Sandeep Singhal: “The growth in small companies and companies which are focussed on a specialisation, is much faster than the leading established players. We are looking at investing in companies which are looking to become leading players in the future rather than the stable companies with lesser risks and lesser rewards.” Adds PwC associate director Pharmaceutical and Life Sciences Practice Sujay Shetty: “This is a new breed of companies which has entered the new space of high potential contract manufacturing and outsourcing. Outsourcing is the biggest growth area in the pharma sector and the PE investments in such firms will continue.” […]
Nexus India Capital has closed a US$100 mil. venture cap fund to invest in a number of sectors including media, communications and technology. The fund and its portfolio companies will be advised by entrepreneurs and investors in the technology, media, outsourced services, retail and consumer sectors. The founders of the fund and its advisory companies include Naren Gupta, Sandeep Singhal, Suvir Sujan and Intel senior executive Bill Davidow. Baazee.com co-founder Sujan said, “Smart entrepreneurs realize that they need more than just money. We are successful entrepreneurs who have founded, built and exited companies successfully in the technology, services and consumer arenas. Our entire team of advisors in India and Silicon Valley is accessible to all the entrepreneurs we back for support on strategy, operations, organizational building, sales amongst others.” […]
Global oil major Royal Dutch Shell will buy Bharat Petroleum Corp Ltd's (BPCL) 49 per cent stake in lubricant marketing firm Bharat Shell Ltd (BSL) for Rs 152.40 crore. BPCL is exiting the joint venture company, floated in 1993 to market Shell branded lubricants in India, as it has developed a competing product. “The Cabinet (at its meeting yesterday evening) gave its approval for the sale of 49 per cent equity stake of BPCL in BSL to Shell or its affiliate for a consideration of Rs 152.40 crore in cash,” Information and Broadcasting Minister P R Dasmunsi said on Friday. Shell currently holds 51 per cent stake in BSL. BSL incurred losses till financial year 2001-02 but after hiving off its loss-making LPG business, the company showed signs of turnaround and posted a net profit of Rs 12.12 crore in 2006-07. […]
Post-production firm Prime Focus on Thursday said it will acquire two US firms – Post Logic Studios and Frantic Films – for $43 million, a move that would broaden the global footprint of the company. Prime Focus Group is in advanced negotiations with two unlisted entities in North America and is close to reaching a final agreement to this effect, the company said in a filing to the Bombay Stock Exchange. These acquisitions would add to the global footprint of Prime Focus, which currently has six visual effects and post- production facilities across India and four facilities in London. The acquisition would also add rights to over 55,000 sq ft of real estate in Hollywood and a talent pool of 200 new staff, the company said. Besides, it would give Prime Focus Group access to the R&D division of Frantic Films, which develops and markets visual effects software solutions. […]
It could be a big showtime for entrepreneur Rohinton “Ronnie” Screwvala. The US based $63 billion entertainment giant, The Walt Disney Company Ltd, the company behind Mickey Mouse and Donald Duck cartoons, is all set to acquire management control in UTV Software Communications Ltd, the company promoted by Screwvala. Disney had acquired 14.85 per cent in UTV at Rs 200 per share in August 2006 and will acquire 11 to 15 per cent more through a private placement of new shares at around Rs 1,250 per share, industry sources told Hindustan Times. The deal, if it goes through, could pave the way for Disney to set foot in the country's exploding entertainment market through its hold over one of the foremost content producers. Walt Disney, which is expected to make a public offer to minority shareholders under regulatory rules to buy 20 per cent more stakes, plans to ramp up its operations in India that include setting up of mega theme parks and a captive production centre for its global business. The fresh funds would be used to build infrastructure to create software for the global operations. Screwvala and associates currently control 30.67 per cent in UTV and his stake is expected to come down to 26 per cent after the placement of new shares. Despite repeated attempts, the UTV chief could not be reached for his comments. Sources said the deal is expected to close in December itself. At the current market value of about Rs 1,800 crore, Screwvala and associates have stakes worth well over Rs 500 crore. […]
mGinger, a Bangalore-based start-up in mobile advertising, today announced that it has attracted $2 million in funding from Draper Fisher Jurvetson and NEA-IndoUS Ventures. The company will use proceeds of the financing to significantly grow its business, build up their technology stack and ramp up their marketing and sales force. mGinger provides advertisers with permission-based, targeted marketing. mGinger enables advertisements including offers, vouchers, news and more, sent in the form of SMS on consumers’ mobile phones. These advertisements are specific to consumer interests and demographics mentioned during sign-up (www.mginger.com) and received only in the timings that consumers specify. An additional value-add for consumers, is the earning potential of receiving these advertisements, which is redeemed through a gift cheque from mGinger. “We at mGinger believe that there is much more to mobile phones than receiving advertisements through text messages.” said Chaitanya Nallan, CEO, Gingersoft Media Private Limited. “With this funding, we look forward to bringing a lot more innovative services to mobile users in the near future and opening up this potentially huge market in India. We are delighted to have investors like DFJ and NEA partner with us in this venture.” “We are ecstatic about not only what mGinger has accomplished but what the prospects are.” said Mohanjit Jolly, Executive Director, Draper Fisher Jurvetson. “The ubiquitous presence of the mobile phone in India and the SMS usage makes this a highly promising market and serves as a potential ‘holy grail’ for consumers as well as advertisers.” […]
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