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Following an investor outcry, Satyam Computer Services Ltd. late Tuesday dropped a $1.6 billion plan to buy stakes in a pair of infrastructure companies in which the Indian software company 's founders held stakes. The decision came just half a day after Satyam said its board had approved the plan to buy 51% of Maytas Infra Ltd. and all of Mytas Properties Ltd. The reversal was forced after Satyam's American depository receipts fell $6.85, or 55%, to $5.70 in 4 p.m. New York Stock Exchange composite trading. The ADRs rebounded 56% to $8.89 in after-hours trading. Analysts criticized the proposed buyout because of the construction companies' lack of relevance to Satyam's core business, and because Satyam's founders, led by Chairman B. Ramalinga Raju, hold stakes of 36% in Maytas Infra and 35% in Maytas Properties. […]
FDI inflows declined 26% in October this year compared to the same month last year, commerce minister Kamal Nath told the Lok Sabha on Tuesday. Experts attribute this fall after seven months of robust growth to the drying up of investments from countries hit by the global slowdown. The inflows in September 2008 had registered a steep growth of 259% to $2.56 billion against $713 million in September 2007. In contrast, the figure for October 2008 fell to $1.49 billion compared to over $2 billion in October 2007. However, experts caution that a part of the October decline could also be attributed to a higher base in 2007 as FDI flow during the month was almost three times higher than in September 2007. […]
India’s fourth-largest software company, Satyam Computer Services on Tuesday announced acquisition of 100% stake in Maytas Properties for $1.3 billion and 51% stake in Maytas Infra for $0.3 billion. The company’s decision, which comes as a surprise is being termed as a move to diversify its portfolio in non-IT sectors, which has been facing the heat of the global meltdown. Maytas, which is the reverse word for Satyam is promoted by two sons of B Ramalinga Raju, chairman and founder of Satyam Computer Service. The decision has been approved by the company’s board of directors. Analysts and institutional investors do not seem happy with this move and some are likely to oppose it. […]
Private equity funds IDFC Private Equity Co. Ltd (IDFC PE) and UTI Ventures have acquired substantial stakes in Deepak Cables (India) Ltd, a Bangalore-based unlisted manufacturer of aluminium conductor wires, for some Rs285 crore, two bankers familiar with the transaction said. IDFC PE invested Rs200 crore from its $700 million (about Rs3,353 crore) IDFC Fund-III, Satish Mandhana, managing director of the fund, confirmed. UTI Ventures invested the remaining, he added. Both funds have acquired stakes from the promoter and managing director of Deepak Cables K. Venkateshwara Rao and his family. […]
Reliance ADAG is close to acquiring 50% stake in a UK-based currency exchange and money transfer firm for an undisclosed amount. This will enable the Indian company to sell its financial products to the 1.4 million NRI population. The name of the UK firm is under wraps but a person with knowledge of the development said the target company was recently named as one of the fastest growing firms in the UK with more than 250 outlets. “It could either be TTT Moneycorp or No1 Currency,’’ he said, adding, the deal will be routed through Wall Street Finance, an Indian public-listed firm that ADAG acquired recently to enter the money transfer business. […]
OVL is eying to save $1 billion by picking just 51 per cent stake in Imperial Energy. The decision is taken after many deliberations as the deal is not much attractive due to the steep decline in crude oil rates in the international market. However, the government gave its nod to the proposed acquisition on the grounds of energy security. ONGC Videsh (OVL) had approached the UK Takeover Panel to extend the time limit for the proposed acquisition of the UK's Imperial Energy. The company said that it suffered delay in approval of the proposal from the Indian government due to recent attack in its financial capital, Mumbai. However, the request was turned down by the UK penal on the grounds of financial loss to the company being acquired, and violation of rule Rule 2.5 which stipulates the necessity to make an offer within given time. […]
Deepak Cables (India) Ltd has announced a private equity investment of Rs2bn from IDFC Private Equity (IDFC PE), India’s leading private equity fund focussed on infrastructure. Deepak Cables is one of the leading players in the power Transmission & Distribution (T&D) space having captive aluminium conductor manufacturing facilities. Bangalore based Deepak Cables was promoted by visionary industrialist K. Surya Rao. It started in 1982 as an aluminium conductors manufacturing company and over the last two decades has grown to become one of the largest T&D EPC players in the country. Deepak Cables with its two aluminium conductor manufacturing plants at Tumkur and Pondicherry and in-house design and engineering capabilities is one of the few players having the expertise to execute projects end-to-end: from design to commissioning. […]
Debt funding for new infrastructure projects is facing bottlenecks with private equity (PE) funds exiting from investment commitments. Banking sources said that only the existing pipeline sanctions were being disbursed. However, banks are not prepared to release debt funds to some planned power projects, including ultra mega power projects. This is because promoters have relied substantially on PE funds. PE funds, in the past, had resorted to using leveraged buyouts. This implied using borrowed funds for acquiring equity stakes in new projects. PE funds had committed equity funding in some projects up to 49 per cent. […]
IL&FS Investment Managers (IIML), the private equity subsidiary of infrastructure financing major IL&FS, has closed its $225-million growth equity fund. In mid-2007, IIML had effected the first closure at $150 million and it brought about the final closure at $225 million recently. Industry sources said IL&FS Investment Managers were planning to raise a $400-million fund, but had to close it at $225 million, given the current market conditions. IIML is among the earliest venture capital and private equity players in India and, during the course of the last 14 years, it has raised and managed nine funds, ranging from sector-specific funds like real estate to sector-agnostic private equity funds. It currently manages and advises investments in excess of $2 billion across all sectors. […]
With traditional sources of finance in short supply, most Indian companies, including leading corporate houses, are turning to private equity to raise capital. Private equity is looking more attractive as factors like the ongoing credit crunch, tighter lending norms imposed by banks and slowing demand have forced companies to prioritise their capex plans. According to a cross-section of big ticket PE firms ET spoke to, PE investments could gross $10-12 billion in the next financial year. While this may be less than the previous year, it is a substantial amount in the middle of a global downturn. Investments would start flowing once promoters begin to align valuation expectations to the corrections in the market, officials at a number of PE firms said. […]
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