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The promoters of Indian companies are hiking their stake through the issue of warrants and preference shares. A host of small and mid-cap companies such as Webel SL Energy, Madhucon Projects, Alphageo India and Almondz Global (formerly Allianz Securities) have issued warrants or preferential shares to their promoters in recent months. Companies generally opt for warrants as they are not required to pay money upfront and can redeem them within 18 months, according to experts. With the threat of takeovers looming large, promoters are using the preference and warrant route to increase their stake. A preferential issue is an issuance of equity shares to the promoter group or selected investors. It covers fully convertible debentures, partly convertible debentures or any other financial instruments that could be converted into equity shares at a later date. One of the main reasons why companies go for preferential issues is that they can raise money quickly and cheaply compared with other means such as IPOs or rights issues. However, since preferential issues are meant for a certain class of investors, the retail investors are deprived of investment opportunity. […]
Norwest Venture Partners (NVP), a leading Silicon Valley venture capital firm, has opened office in India. The firm, led by Promod Haque, is best known for its technology investments. Its portfolio has 60 companies including 20 that are based in the US but have an Indian presence. Five of its investee companies are based in India. Norwest’s India operations will be based in Mumbai and headed by Niren Shah as managing director. Shah was earlier with eBay in the US as senior director of strategy and ventures and before that with KPMG’s corporate finance team in India. Two more executives are likely to join the team in Mumbai as the fund expects to finalise more India investments. Unlike a few VC firms that have floated India specific funds, NVP makes all its investments from a global fund. The investments are across the US, India and Israel. The firm has around $2.5 billion under its management with the current fund at $650 million. Mr Haque said the number of India investments may to go up from 10% to 15% of the total fund size.(ET) […]
Institutions, who were unwilling to touch IFCI with a barge poll even a few years ago, now want to buy a stake in the company. Soon it will be clear whether such interests are genuine, or the hype around the scrip is only to help some operators who have built up positions to make a killing. The latest buzz is that the US-based hedge fund DE Shaw has joined the race for acquiring a strategic stake in IFCI, India’s oldest state-owned financial institution. DE Shaw, with assets worth over $30 billion, is believed to have put in bids in response to IFCI’s decision to sell a 26% stake in favour of strategic investors, said sources. When contacted by ET, DE Shaw country head Anil Chawla said: “I do not comment on my investments.” Apart from DE Shaw, a host of other leading investors are also reportedly contending for the IFCI pie. Blackstone, Citigroup, Barclays and Standard Chartered Bank figure prominently among the possible foreign suitors. Besides some of IFCI’s investments which have grown in value, the stock is thriving on the story that there is a real estate play underlying several dud loans of IFCI. […]
3i Infotech Ltd. said on Tuesday that it has acquired a strategic stake of 26% in Taxsmile.com India Pvt. Ltd. (Taxsmile), with a commitment to acquire a majority stake over a period. Taxsmile is a company engaged in Internet-based tax filing and tax advisory space for individuals. The company believes that given the growth in the number of tax payers in the country and the position taken by the Government in the area of e-governance, this sector will see a huge growth in the years to come, 3i Infotech said. This acquisition along with the recent acquisition of a majority stake in HCCA Business Services, a company in the area of HR and payroll management, gives a strong position to penetrate the market in the initial period of growth, 3i Infotech said.( India Infoline) […]
Private equity firm IL&FS Investment Managers Ltd has tied up with Milestone Capital Advisors Pvt Ltd to raise up to Rs 1000 crore through a real estate fund, it said on Monday. The IL&FS-Milestone Fund-I is a four-year close end fund with an option to extend the term by two more years, if required, the two firms said in a joint statement. The fund is looking at a initial corpus of Rs 1000 crore, including a greenshoe option of Rs 500 crore. It is looking at an annual yield of 11 per cent and an annual return of 18-20 per cent with the property price appreciation, it said. The minimum investment in this fund is Rs 0.1 crore for individuals and Rs 1 crore for corporates. It opened for subscription on Monday and will close on October 30, the statement said. (Sify) […]
UK-based Ashmore Investment Management Ltd is picking up a 74 per cent stake in Broadband Pacenet, a Mumbai-based broadband services provider. Earlier, Zee Group had agreed to buy out Pacenet but the deal did not conclude over differences in valuation. In May Jagjit Kohli, one of the three founder-promoters of Pacenet, quit Zee's demerged cable company Wire & Wireless India Ltd (WWIL) where he was the managing director. Broadband Pacenet will soon apply for FIPB (foreign investment promotion board) clearance. “We are making an application to FIPB for its approval to enable Ashmore take a 74 per cent stake in Broadband Pacenet,” says Kohli. The FIPB, in fact, has advised Broadband Pacenet to submit a revised proposal. This follows the new guidelines on ISPs (internet service providers) which allow a 74 per cent FDI (foreign direct investment) cap. Broadband Pacenet had earlier made an application to FIPB for a 100 per cent FDI clearance. […]
Kemwell Pvt. Ltd, a leading provider of contract manufacturing and development services for pharmaceutical products in India and Sweden, is in talks with private equity (PE) funds for diluting its stake. It is also looking at acquisitions in Sweden and the US. Explaining the rationale behind such future acquisitions, PerAke Oldentoft, board member, Kemwell AB said, “It is much more expensive to set up a greenfield facility. It also saves time and money.” Kemwell AB is the Swedish arm of Kemwell Pvt. Ltd. It already has a manufacturing facility at Uppsala in Sweden, which employs 170 people and manufactures active pharmaceutical ingredients, tablets, capsules and suppositories. In addition to its Swedish facility, the company also operates four manufacturing facilities in Bangalore. The company says its strategic moves will help it take a crack at the global market for contract manufacturing of prescription drugs, which is estimated to grow to $43.9 billion (Rs1.8 trillion) in 2009. A study by audit firm KPMG , on the Indian pharmaceutical industry’s collaboration for growth, argues that India and China alone could potentially account for 35-40% of the outsourced market share for active pharmaceuticals ingredients, finished dosage formulations and intermediates. […]
Arysta, the target, is a leading crop protection and life sciences firm. Another big-ticket global acquisition by an Indian company is brewing. United Phosphorus and Tata Group enterprise Rallis India are in the race to acquire the world’s largest privately held crop protection and life sciences firm, Arysta LifeScience Corporation, from private equity firm Olympus Capital Holdings. Sources close to the development said these two Indian companies were among the six contenders for the Tokyo-based firm. The acquisition is expected to cost nearly $2 billion (Rs 8,200 crore), or nearly double Arysta's turnover of 124.1 billion yen (Rs 4,400 crore) last year. Other bidders include an Israeli firm, Australia’s Nufarm and Blackstone, the global private equity fund. “Six companies have been invited to submit their non-binding bids. A decision on the sale of Arysta is expected by the end of October,” said a banker in the know of the developments. […]
India ranks second in capital market inflows and fourth in merger and acquisition deals in Asia Pacific (including Japan), as deals worth $65.033 billion were reported in the first eight months of calendar 2007. The data compiled by Thomson Financial revealed that 121 Indian firms mobilised $23.96 billion, while there were 697 M&A deals worth $41.069 billion. The strong inflows saw India’s share in capital markets in Asia Pacific region increase to 17.3 per cent from 9.7 per cent in calendar 2006. With Indian firms making overseas acquisitions and placing shares to private equities, its shares in merger and acquisition deals have increased to 10.3 per cent from 7.9 per cent in calendar 2006. The Indian firms have heightened activities in equity market and mergers and acquisitions mart in the last four years. The equity markets snapshot shows that 56 firms mobilised 9.27 billion in 2004, 14.39 billion in 2005, $16.1 billion in 2006 and 23.96 billion in the first eight months of the current calendar year. On the M&A platform, the total cross boarder deals registered $4.3 billion in 2004, $12.58 billion in 2005, $34.72 billion in 2006 and $54.48 billion in the eight months of 2007. […]
The publisher of southern editions of The Indian Express newspaper, Express Publications (Madurai) Ltd, plans to launch an initial public offering (IPO) sometime soon. Before that, it plans to sell stake to a private equity firm. The company is working on an aggressive expansion plan and the funds raised through these will help it bolster its operations and expansion. The company is known as The New Indian Express group because it was carved out from the old group in 1999 following a family litigation that started after the death of the founder of the group, Ramnath Goenka; the other part became The Indian Express Newspapers (Mumbai). The company has appointed YES Bank to look for private equity investors. “Private equity is the logical route for the group to take,” said Manoj Kumar Sonthalia, chairman and managing director of Express Publications. The New Indian Express is published from 14 centres in the South. Apart from The New Indian Express, the group also publishes two vernacular dailies, Kannada Prabha and Dinamani, a Tamil daily, and claims a combined circulation of around 5,50,000 for all its publications. Though the split between The New Indian Express Group and The Indian Express Newspapers (Mumbai) Ltd, is complete, the two still share content and advertisement. However, both companies have dismissed the possibility of a merger. […]
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