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A line-up of private equity investors, including the biggies, are in the race to buyout the 32% stake held by Indian promoters in Sony Entertainment Television (SET). Sources said Warburg Pincus, Blackstone and Standard Chartered Private Equity, among others, were exploring a possible deal after SET kicked off a stake divestment process to facilitate the exit of the Indian promoters and Capital International. It is believed the promoters are seeking an equity valuation pegged between $1billion and $1.5 billion for the company, valuing the local shareholding at around $300-400 million. Sources said some potential suitors may value the company at around $1 billion, and it is not certain whether it would meet with approval from the existing shareholders. Asked about Indian promoters being in talks with private equity investors, Kunal Dasgupta, chief executive officer, SET, said: “This is not an area that I comment on.” The five local promoters exploring exit include actor Jackie Shroff, Shemaroo Films managing director Raman Maroo, World Media group director Sudesh Iyer and MobiApps Holding’s Jayesh Parekh. An email sent to Ron Sato, vice-president of corporate publicity at Sony Pictures Television International, remained unanswered at the time of filing the story. […]
The Indian private equity (PE) industry’s fondness for private investment in public equity (PIPE) deals remains unaffected by soaring share prices. If anything, it has only grown stronger. Till September this year, PE firms announced 16 such deals worth an estimated $1.71 billion (Rs6,720 crore), against $1.25 billion across 36 deals for all of 2006. Overall, PIPE deals accounted for 21.5% of the estimated $7.92 billion worth of PE transactions announced between January and September. This, however, does not include deals announced by non-PE investors such as hedge funds and other financial institutions and the actual share of PIPEs could be much higher. Unconfirmed estimates put PIPEs at 40-60% of all deals announced this year. “The proportion of such investments in India is significantly higher compared to international levels,” says Biswajit Subramanian, managing director, Providence Equity Partners Llc. The firm opened shop in New Delhi in January and says it is agreeable to PIPEs under the right circumstances. There are some, however, who regard PIPEs as a strategy that goes against the basic objectives of PE investing. “The question is, as a PE investor, what kind of (shareholder) rights do you get when you take a minority interest in a public company?” asks Anil Ahuja, managing director and co-head, Asia, at 3i Group Plc. […]
Bajaj Auto has bought a 14.5% stake in Austria’s KTM Power Sports AG, Europe’s second-largest manufacturer of sports-bikes, for over Rs 300 crore. The acquisition has been done through its subsidiary Bajaj Auto International Holdings BV. The stake and alliance allows Bajaj to manufacture KTM-branded bikes in the range of 125cc and 250cc at its Chakan plant, which will be sold in Europe. An added benefit: KTM’s platforms for 125 cc and 250 cc bikes will be used by Bajaj to design its own ones. But there will be no joint branding — Bajaj and KTM bikes will be sold separately, both in India and abroad. Bajaj will also distribute KTM’s entire range of motorcycles in India and the ASEAN region. These include top-end models such as the 990cc Super Duke, the 690cc Duke, and the 450cc executive model. Following the stake acquisition, Bajaj becomes the second-largest shareholder in KTM after its promoters. The company could consider increasing stake at a later date, sources said, though company officials declined to comment. S Ravikumar, vice-president (business development) told DNA Money that while it was too premature to dwell on production numbers, the first bike could roll out of the facility during 2009-10. “This is an integrated operation involving R&D, engineering and the supply chain of vendors and distributors,” he said. The 125cc and 250cc bikes could typically focus on discerning customers on the lines of the Bajaj Pulsar and, to that extent, will contribute to the ‘going up the value chain’ mantra. […]
Enam Capital, an investment arm of Enam Group, is picking up an 11.76% stake in the proposed expanded capital base of TIL (formerly Tractors India). TIL is a 63-year Kolkata-based heavy engineering company, which has clocked a Rs 310-crore turnover in the first six months of 2007-08. Confirming the development, a senior official of Enam Securities told ET: “Enam Capital is a proprietary investment arm of Enam Group. It is picking up stakes in TIL.” Enam Capital is owned by Vallabh Bhansali and his family members. TIL managing director and CEO, Sumit Mazumder also said: “We are issuing warrants on private placement basis to the promoters and Enam Capital to raise Rs 97 crore. The board of directors cleared the proposal on November 4. It will be now placed before shareholders for their nod. We will convene an extra-ordinary general meeting for the purpose.” TIL’s present paid up capital is Rs 9.73 crore. This is proposed to be raised to Rs 13 crore. Currently promoters hold 44.3% in TIL, while financial institutions have 22.36%. Mutual funds and public hold 13.77% and 19.57%, respectively. According to a notice issued by TIL to the BSE on Monday, the company said that the board has approved private placement of some 29,93,842 warrants to the promoters and a “select group”, aggregating Rs 97.59 crore. The warrants would be converted to equity shares 18 months from the date of issue, at a price of “Rs 326 per equity share including premium of Rs 316 per share”. This would mean that each privately placed warrant would be converted to one equity share of Rs 10 each at a premium of Rs 316 per share. […]
Private Equity (PE) investments in India have grown to $10 billion so far this year from $2 billion in 2005, and has emerged as the top destination in Asia (excluding Japan) surpassing China that recorded $8.3 billion in investments so far. According to a statement from IndusView Advisors, a cross-border advisory firm, the Indian real estate and infrastructure sectors have been the key contributor to this increasing trend as it emerged favourite with 50% share in value of all PE investments with an inflow of about $5 billion in 52 deals this year. Real estate has emerged as the favourite segment with 26% share in value of all PE investments having received $2.6 billion in 32 deals, and was closely followed by telecommunications with 21% share in value of all investments at $2.1 billion. “India's private equity market can expand four-fold using deal value as a percent of gross domestic product, and maintain the top slot ahead of China, its nearest competing economy. The infrastructure sector will provide the necessary edge.” said Bundeep Singh Rangar, chairman, IndusView. […]
After IT and telecom sectors, special economic zones (SEZ) have caught the fancy of private equity (PE) companies, with most firms looking at acquiring a minimum 10 per cent stake in SEZs. Global PE firms such as Goldman Sachs, Deutsche Bank, Blackstone Group, Lehman Brothers and others have already initiated talks with domestic real estate companies that are setting up these zones. Not to be left behind, Indian PE companies such as Kshitij Real Estate Funds (a Pantaloon Group company) and HDFC Realty are also scouting for opportunities in this sector. Even though no deals have been signed so far, the industry expects some to come through in the next two to three months. “Real estate developers setting up SEZs are getting a lot of queries from investment companies. This sector being a booming one, companies are looking at making an investment that could yield returns at a later point in time,” said Ashutosh Pathare, vice-president (commercial sales and business development) of the real estate company, Shapoorji Pallonji. […]
A US-based private equity (PE) major is investing Rs 5,000 crore into Hotel Leelaventure, the parent company of one of India's leading hotel chains – Leela Palaces, Hotels and Resorts. Industry sources said the PE firm is most likely Blackstone. “Leela and Blackstone have been in talks for a while,” they said. This would be one of the biggest private equity investments in an Indian company. Speaking to TOI, chairman of the Leela Group, Capt C P Krishnan Nair confirmed the investment. “We have got close to Rs 5,000 crore worth of funding, which will be spent on our ongoing projects and for expansion purposes,” he said. But he declined to divulge the name of the PE firm or state how much equity dilution had taken place. Leela has four properties across the country and has six more in the pipeline – in Chennai, New Delhi, Hyderabad, Pune, Udaipur and Jaipur. […]
Several private equity (PE) groups are creating funds exclusively for investing in clean technology in India, adding momentum to a sector where no funds currently exist. These groups include the Nevada-based Arvco Capital Research Llc., Washington, DC-based Global Environment Fund, Hyderabad-based New Ventures India, New Delhi-based Sun Group and Mumbai-based Yes Bank Ltd. These are in addition to the increasing number of PE funds chasing the same segment from their general funds. The capital pool is estimated at $500 million (Rs1,970 crore), not including the general funds, which is almost equal to the sum of all disclosed investments in Indian clean technology from 2001 until now. The funds could close in the next nine months to three years and would be deployed over the next one to seven years. Interest in India is strong as many perceive the country as having the right talent fordeveloping technology and the additional incentive to do so be-cause of its growing power needs—and shortages. […]
Daimler has pulled out of the race for a stake in Indian bus and truck maker Eicher Motors Ltd, the Business Standard said on Sunday. That has left Volvo, Renault, Mahindra International, a joint venture of Mahindra & Mahindra Ltd and Navistar's International Truck and Engine Corp, and “some other unidentified companies,” it said. “We were in talks with Eicher, but we are not looking at having any partnership. We are not interested in that company,” the paper quoted a Daimler India executive as saying. Eicher Motors has said it is evaluating partnership options. Daimler, which recently began assembling some Actros trucks in India, has said it was very close to naming a local partner. It makes buses in India in partnership with Sutlej Motors Ltd. […]
Bangalore based IT company, SPAN Infotech India Pvt. Ltd has announced that it has reached an agreement with EDB, which will acquire a 50.1% stake of the company. EDB is, one of the largest IT groups in the Nordic countries, with over 40 years’ experience of serving leading Nordic businesses and over 4,600 employees with revenues of over $1 billion (Rs3,925 crore). EDB delivers solutions that cover the entire range of business critical IT services. SPAN Infotech employs about 550 professionals working from 3 office locations in Bangalore, India, and is principally working in the areas of applications development and applications management. This acquisition represents one of the largest-ever investments by a Norwegian IT company in Asia. It is expected that the transaction will be implemented towards the end of the fourth quarter of 2007. The current management of SPAN Infotech will continue to run the company following the acquisition. […]
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