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Private equity firms and foreign institutional investors attract a lot of admiration. Of late, several big boys from the institutional world have suffered heavy losses in their multi-million dollar investments.But what still remains a mystery in this saga is how Money Matters Finserv, with questionable pedigree, managed to attract a stupendous Rs445 crore from renowned institutional investors, just one month before its chairman, Rajesh Sharma, was under CBI investigation for brokering deals through political connections. Four FIIs-Morgan Stanley, Wellington, Fidelity and GMO-put in as much as 60% of the funds into the firm through a qualified institutional placement (QIP) in late October. Two years ago, New Silk's investment in high-profile 9X media group crashed and burned. The most recent instances are the exits of Warburg Pincus and ChrysCapital from auto components manufacturer Amtek India.Another PE firm, Citigroup Venture Capital International (CVCI), carved out an 11% loss when it cashed almost 7% of its 10.44% stake in Jindal Drilling recently. However, Warburg Pincus also made a terrible bet on Moser Baer. This was one stock about which the market was always sceptical. Its accounting was seen as unreliable, especially since CDs (compact discs) were hardly a high-margin business. Very few FIIs seriously bought this stock. Warburg Pincus was alone in keeping the faith for a very long time, which turned out to be misplaced. […]
IL&FS Milestone Realty Advisors Pvt. Ltd and Morgan Stanley are among those looking to buy a Rs.550 crore commercial asset of Kotak Realty Funds Group (KRFG) in suburban Mumbai, said two people familiar with the development. KRFG, the private equity fund of Kotak Mahindra Bank Ltd, bought the multi-tenanted, Goregaon office building in 2006 for Rs.200 crore from K Raheja Constructions, and is now planning a complete exit by selling it off to a single investor. The fund will evaluate offers made by IL&FS Milestone and Morgan Stanley and the deal is expected to close by December, said one of the persons mentioned above. “This has been a phenomenal investment for Kotak with an internal rate of return (IRR) in excess of 40% and (the asset) is a marquee property with stable rentals,” he said. […]
India Venture Partnership (IVP), a leading early stage venture capital firm, today announced an investment of INR 100 million in Your Kids ‘R’ Our Kids® (YKROK) Education Private Limited. YKROK is a day care and education centre that offers a truly premium experience in early learning and care. With a capacity of serving more than 2,000 children in India across 12 centres today, and a growth strategy to create a network of 65 centres in the next three years serving more than 10,000 children in 10 cities across India. The new infusion of funds will fuel YKROK’s pan- India expansion plans. With a strong vision to deliver quality services and education, YKROK curriculum is on par with international standards as that of enhancing the child’s English language development, cognitive development in math and science and socio-emotional development. Focussing on delivering quality child care services and education, all the YKROK centres follow stringent Standard Operating procedures with world class methods & techniques of educational childcare. YKROK centres are in the process of getting certified and awarded with a gold seal by leading American Training Institute Teaching Strategies. […]
Demand for private security services is growing, helping the business attract interest from private equity (PE) firms and foreign investors, in the wake of terror attacks in big cities. The sector has seen mergers and acquisitions (M&As) worth $400 million (Rs.1,812 crore) over the past two years, according to global consultancy firm Grant Thornton India. In August, Goldman Sachsowned Danish facility management firm International Service System A/S (ISS) acquired Chennai-based SDP Cisco for Rs. 200 crore, according to VCCircle, a trade publisher. Last year, G4S Plc, the largest security services provider in India by revenue, acquired Eureka Forbes Ltd project security systems arm for an undisclosed amount. Indian business TOPS Security Services Ltd, or Topsgrup, acquired the UK,s The Shield Guarding Co Ltd for $31.25 million in 2008. PE firm ICICI Venture Funds Management Ltd invested $26.74 million in Topsgrup in 2007, Standard Chartered Private Equity Ltd invested $33 million in Firepro Systems Pvt Ltd in late 2009, and DE Shaw group picked up a 14% stake in Security and Intelligence Services (India) Ltd, or SIS, in 2008. […]
The government has decided to sell 30 per cent stake held through Telecommunications Consultants of India Limited (TCIL) in Bharti Hexacom Ltd . Minister of State for Communications and IT Sachin Pilot today informed the Lok Sabha that the government has approved in principle sale of the entire 30 per cent stake of TCIL in Bharti Hexacom. The sale should be at the right time to obtain the best price, he added. Bharti Airtel holds 70 per cent and TCIL holds the remaining 30 per cent in Bharti Hexacom. […]
The stock markets are seeing another round of exits by high profile private equity investors in the last one week. The PE firms to exit stocks are Warburg Pincus, which sold over half its shareholding in Amtek India, and Citigroup Venture Capital International (CVCI) encashing 7 per cent out of its total stake of 10.44 per cent in Jindal Drilling. It is interesting to note that Warburg Pincus and CVCI booked losses and got out of their positions, while ChrysCapital's with its exit of Infosys reportedly made a killing of 129 per cent in profits. Strictly speaking, a loss booked by a PE firm need not result in an actual loss. It is a loss on paper only, said the head of a research house, on condition of anonymity. Many a time the acquisition price itself is over invoiced. On November 19, Stoneridge Investments, an account of Warburg Pincus International Llc, sold 38.02 lakh shares at an average price of Rs 64.8 in Amtek India, while CVCI sold 15.93 lakh shares of Jindal Drilling at a price in the range of Rs 565 and Rs 570. […]
According to analysts, real estate prices, across cities, have witnessed a significant appreciation in the recent past. In fact, prices in some regions have surpassed their highs of 2008. Real estate funding has also been picked up over the past 11 months. The period between January and August has seen private equity investors closing 25 real estate deals, totalling $990 million. Developers have raised Rs 1,109 crore by way of debt placements and Rs 2,225 crore by way of public issues.Capital market regulator the Securities and Exchange Board of India (SEBI) has told asset management companies (AMCs) to avoid exposure to real estate debt in certain schemes. According to fund officials, SEBI has directed asset management companies to mention a ‘negative sector list’ in their draft prospectus, and give an undertaking that they will not invest in sectors that appear in this list. […]
Abbott India Ltd., a listed subsidiary of drug maker Abbott Laboratories, and Solvay India Ltd. have jointly announced on Wednesday they will merge at a swap ratio of 2:3 where every shareholder of Abbott Laboratories will receive three shares of Solvay India for two shares they own. This merger follows a global acquisition of Belgian-based pharmaceutical company Solvay SA by Abbott in 2009 in a 4.8 billion euro global deal. Anuj Mithani, director-healthcare, UBS Ltd. said, “We have used a bottom-up analysis by looking at various parameters including valuation of like companies in the sector and Abbott’s future plans.” […]
It was literally a big-bang event for Mahindra & Mahindra in Seoul on Tuesday. M&M said it would pay $463 million (around Rs 2,100 crore) for a 70 per cent stake in SsangYong. Of this, $378 million would be in new stock and the balance $85 million in corporate bonds. After completing all the acquisition procedures and repayment of claims, the corporate rehabilitation process is likely to be finalised by March 2011. “The coming together of M&M and SsangYong will result in a global UV (utility vehicle) player. With its financial capability, M&M offers competence in sourcing and marketing while SsangYong has strong capabilities in technology,” Dr Pawan Goenka, President of M&M's Automotive and Farm Equipment Sectors, said in a release. […]
Valuemart Retail (India) (Valuemart) that Valuemart have acquired 573,950 equity shares of Residency Projects & Infratech representing 59.86% of the total paid up equity of the company from the existing promoters. The acquisition was done on Nov. 18, 2010 as an off market transaction vide share purchase agreement dated Nov. 18, 2010. The stock had underperformed the market over the past one month till Nov. 23, 2010, 0.00% compared with the Sensex`s 2.35% decline. It underperformed the market in past one quarter, 0.00% as against 6.97% rise in the Sensex. […]
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