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Corporate venture investing seems to be taking wings in India. After the $200 million healthcare fund by Piramal Enterprises recently, it’s now the turn of auto major TVS group to foray into private equity/venture capital. It’s not known whether TVS will invest only in ventures that have a direct bearing on the group’s businesses – auto and auto components, and electronics – or whether it will look at opportunities without any sector-bias. But what’s for sure is that the group is looking at hiring and operations are set to start soon. The website of IIM Calcutta hosts the company’s recruitment requirements. Gopal Srinivasan, whole-time director of TVS Electronics Limited, joint managing director of Sundaram-Clayton Limited and TVS Motor, and also director of various other TVS Group companies, is said to be spearheading the initiative. Srinivasan also serves on the board of ICICI Venture. The group’s foray into the venture capital/private equity space comes at a time when many Indian corporates have started getting into this space. […]
Venture capital investors globally, especially those in the technology space, like to invest in product companies. The risks are higher compared with services companies, but a successful product offers greater opportunities to scale up and, therefore, much higher returns. In India, investor play in product companies has been muted so far. However, several venture capitalists (VC) now believe that the market will gain momentum over the next four to five years, and are re-examining investment opportunities in the space. “Product innovation is in its infancy, but will accelerate over the next few years. It is a new area of interest for us, after consumer Internet and services sectors,” says Promod Haque, managing partner, Norwest Venture Partners. The firm recently set up office in India, after investing out of the US for the last three years. Firms such as Helion Venture Partners, Nexus India Capital, Intel Capital, Sierra Ventures, NEA-IndoUS Ventures and Peepul Capital Llc. are all looking to invest in technology product companies. […]
Indian Hotels Co. Ltd. said on Monday that it has acquired a 10% stake in Orient Express Hotels for Rs8.5bn (US$211.28mn). The Tata Group company made the acquisition through its wholly owned subsidiary called Samsara Properties, with a view to expand its brand internationally. According to reports, Indian Hotels has also written a letter to James B Hurlock, Chairman of the Orient Express Board, seeking an appointment to discuss a possible alliance with the company. “As part of this strategy, we have been pursuing alliances and relationships with leading hotel groups that have not yet up a presence in India, but have secured leadership positions in various geographies,” said R.K. Krishna Kumar, Vice Chairman of Indian Hotels. […]
Finnish telecom firm TietoEnator has signed an agreement to acquire Hyderabad-based Fortuna Technologies Pvt Ltd for about Rs 117.84 crore. Fortuna provides research and development (R&D) services and develops turnkey software solutions for major European and Asian mobile device manufacturers of 3G handsets. The acquisition supports TietoEnator’s strategy to build high and extremely qualified spearhead competence for telecom R&D. The impact on TietoEnator’s net sales for 2008 is expected to be about EUR 11 million and profitability of the acquired company higher than TietoEnator’s average level, Fortuna founder and President T C Ashok and TietoEnator marketing head Tommy Anst told reporters at a joint press conference on Monday. […]
The poster girl of India’s beauty business, Shahnaz Husain, is opening up her closely-held company, Shahnaz Herbal, to private equity (PE) players. The company, which dominates the premium product segment, is looking at private equity funding of around $ 43 million (Rs 175 crore) to build and promote new brands. “We are in talks with a host of Indian and foreign private equity firms for fund infusion, but nothing has been firmed up yet,” Sharik Currimbhoy, vice-president, Shahnaz Herbals, told ET. He is the grandson of Shahnaz Husain. Launched in 1970, Shahnaz Herbal has a turnover of around Rs 500 crore now and a valuation exercise is underway. The company proposes to use PE funds to promote new brands such as Shahnaz Forever that will be launched soon. This brand will have an entire range of products targeted at the mass market. […]
American International Group (AIG), Carlyle and General Atlantic Partners are in the final race to pick 10-15% stake in Bangalore-based Sobha Renaissance Information Technology (SRIT) for around $50 million. The deal could value SRIT, the tech arm of Sobha Developers Group, at $400-450 million, a source said. It is believed that AIG is the front-runner in the process managed by Edelweiss, while multi-stage venture capital giant Oak Investments Partners is seen as another possible player in the fray. “Out of the 11 interested suitors, the list has been narrowed down to three, or possibly four. The deal could be unveiled by this month end,” the source added. SRIT, with estimated current revenue of around $60 million, is an emerging player in digitized healthcare, telecom and enterprise solutions. The company is seen attracting 7-8 times valuation on revenues going by the details emerging on the impending transaction. The promoter $2-billion Sobha Group owns almost 100% of SRIT currently. When contacted, SRIT confirmed Edelweiss was running a mandate for picking up a partner, but declined to identify the suitors in the fray. […]
Mumbai-based financial services group, ASK, is planning to set up a $1 billion (approximately Rs 4,040 crore) private equity fund by the end of financial year 2009-10. According to industry sources, the group, promoted by brothers Asit & Sameer Koticha, is in the advanced stages of finalising the blueprint of the PE fund. The group, known for its broking business, is expected to make a formal announcement before the end of this calendar year. In fact, the group is also looking to start a mutual fund and real estate businesses in future. “They are currently in the process of making the white paper for this fund. In the next three or four months, the group would start the PE business. They are aiming to set up a corpus of $1 billion by the end of March 2010,” a source told ET. When contacted, Sameer Koticha confirmed that the group is in the process of setting up PE business but refused to elaborate. “Since things are still being worked out, the only thing I can say is that it will be rolled out soon,” he said. […]
Rajesh Exports Ltd. plans to sell a stake to domestic and overseas funds, Chairman Rajesh Mehta said in a phone interview. The Economic Times reported De Beers and a U.S.-based fund are interested in buying 51 percent of the company and will pay a premium for the controlling stake. Rajesh Exports is India's largest exporter of gold jewelry, according to its Web site. “Several funds including foreign institutional investors have shown interest to buy a stake,'' Mehta said. “I am not willing to comment on any particular buyer or investor.'' He didn't say why he plans to sell shares. (Bloomberg) […]
Another big-ticket buyout could be on the cards. A US-based buyout fund and diamond industry giant De Beers are learnt to have evinced interest in jewellery maker and retailer Rajesh Exports for acquiring 51% stake from its promoters. According to industry sources, while the suitors are yet to make a formal bid, the separate offer by both parties will be to acquire majority control at a premium to the current market price of the listed firm. The market capitalisation of Rajesh Exports is currently at Rs 2,650 crore. The share price of the company went up by 12.4% last week to close at Rs 729.50 on BSE on Friday. An acquisition of 51%, if it goes through, will also trigger a mandatory open offer for an additional 20% of the company. It remains to be seen whether the promoters, who hold 61.5% in the company, agree to sell. When contacted by ET, Rajesh Exports’ chairman Rajesh Mehta said: “I have no comments to make on any such offers. I can only say that we recently attended an investors’ conference in the US and there is a lot of interest from FIIs in the company.” Despite repeated attempts, De Beers India country head Rajiv Bhandari could not be contacted for comments and an email query sent to him failed to elicit any response. The media contact person for De Beers Diamond Jewellery was unavailable for comment. […]
Thanks to the two big-ticket deals, Tata-Corus and Hindalco-Novelis, domestic and overseas deals are now almost equal in value, in the first half of this year. “The first half of this year has seen mergers, acquisitions and takeovers on the domestic front to the tune of $25.5 billion as against overseas deals worth $25.6 billion,” said associate director of Ernst & Young Navroz Mahudawala. He was speaking at a seminar organised by FICCI on Dynamics of Growth Through Mergers, Acquisitions & Takeover. The average size of mergers and acquisitions has grown to around Rs 300 crore recently, he added. While the telecom sector has contributed nearly 41% of M&As in India, broking and asset management have also contributed significantly in 2007. “The pharma sector contributes around 6% as the deal size in this sector is considerably small. However, the sector might have the highest number of deals among all sectors,” Mr Mahudawala said. Most of the deals are by debt method he said. […]
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