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The venture capital sector is jittery as Budget 2008 draws near. VCs, especially the domestic ones, were in a state of lethargy since Budget 2007, when ‘pass through’ status was granted only to investments in specific IT and biotech areas. And the plan to bring overseas M&As involving Indian companies under the tax net, that too with retrospective effect from June 1976, is making them even more worried. “Taxing M&As will be a very retrograde step. The world now sees us as a developed economy and we should behave in that manner. It will be totally unfair to tax M&As, that too in retrospect,” says president of TiE Delhi Saurabh Srivsatava. “The government should also restore the pass through status as it was earlier, as it does not make any material difference to tax authorities. But, for the industry, it’s making a complete mess,” he adds. Another thing worrying the VCs is the government’s move to ‘plug loopholes’ in the Mauritius DTAA (Double Taxation Avoidance Act) because all their acquisitions/investments in India are routed through Mauritius. Many major VCs, like Canaan, Helion, Clearstone and Sequioa, invest in India through routes like Mauritius. According to estimates, VCs invested about $900 million through this route till last year. Other tax havens with which India has a treaty are Cayman Islands, Singapore and more recently Luxembourg. […]
Cleartrip Travel Services Pvt. Ltd has received a third round of funding of $18.5 million (Rs73.58 crore), which brings the total investment in the Mumbai-based travel company to $30.2 million. Venture capital firm Draper Fisher Jurvetson India Advisory Services Pvt. Ltd (DFJ) led the round with a $10 million investment—the firm’s largest in India. DFJ was joined by the Mahindra Group and all the four firms that had previously invested in Cleartrip. India’s travel portals have received a flurry of investment over the past two years since the sector came up in 2005. Since then, the industry has been moving towards consolidation, though the top players are yet to turn profitable. With this investment, Cleartrip joins New Delhi-based Makemytrip India Pvt. Ltd which also got a third round of funding in August. Both are aiming for profitability in 2008 and are on the road to an initial public offering in the next two years. India’s travel portals have received a flurry of investment over the past two years. […]
Real estate firm Housing Development & Infrastructure (HDIL) on Wednesday said the private equity firm DE Shaw is investing $250 million in Mack Star Marketing, an HDIL group company. Mack Star Marketing holds development rights for a 54,000-metre commercial complex being constructed in Andheri. Last week, HDIL had transferred its development rights to this complex to Mack Star for Rs 900 crore. DE Shaw’s investment is in the form of equity and debt. HDIL managing director Sarang Wadhawan said DE Shaw will hold a minority stake, but declined to give details. The investment comes at a turbulent time for India’s capital and real estate markets. The steep meltdown in January and the withdrawal of Emaar MGF’s IPO in February rattled real estate firms who rely on equity to fund their expansion projects. […]
The Dabur Group is learnt to be evaluating a range of options for determining the future direction of Dabur Pharma, the anti-cancer drug company, including a sellout. The options being considered include inducting a private equity investor or a strategic investor, as well as a strategic alliance with a foreign company. It is understood that Dabur Pharma has held discussions with a German pharma company for a partnership, where the possibility of an outright sale has also figured. While Dabur Pharma chairman Mohit Burman was unavailable for comment, CEO Ajay Vij said, “There is no move to induct any partner.” Asked if the company was in touch with any German company for a strategic alliance, he said, “We are in touch with many companies across the globe for hundreds of things, but this (induct a partner or selloff) is pure speculation.” However, a reliable industry source told ET that at present several options are being considered, though no final decision has been taken. A source close to the German company said discussions were at a somewhat advanced stage and the possibility of a total sellout was being actively considered. […]
Foreign private equity funds are queuing up for biting into the city's burgeoning real estate pie. Over the past 18 months, several large PE transactions have been concluded, in addition to an enterprise level hospitality exposure by Credit Suisse in Park Hotels. The inflow of organized private equity began with New Vernon taking exposure in an IT building project developed by Sureka Group in association with Bikram Dasgupta's Globsyn. UK REIT then invested a significant amount in residential projects being developed by the Eden group. The largest private equity exposure in terms of project size came from Starwood Capital and Walton Street into a 150 acre mixed use project being developed by the Sriram group in Hindustan Motors near Uttarpara. Both have pumped $50 million each into the development. “The PE funds have been scouting the turf for the last three years. We are very happy to witness that they are now concluding transactions and deploying money into projects,” said Abhijit Das, regional director, Jones Lang LaSalle Meghraj, the largest real estate consultancy firm in the country. […]
Prozone Liberty Capital is the retail real estate arm of Provogue in India. It is a joint venture between Prozone and Liberty International listed REITs on the London Stock Exchange Prozone now plans to dilute a further 25% stake through an SPV, which will hold four major shopping malls. These shopping malls are planned in Aurangabad, Jaipur, Nagpur, and Indore. The company has received a valuation of Rs 1,800 crore. Jones Lang LaSalle Meghraj Property Consultants Pvt Ltd was the major valuator. They are now looking to raise Rs 450 crore. According to sources, large PE players who are interested include South Africa-based Old Mutual Property Investments; GIC, which is the fund raising arm of Government of Singapore; and Qatar Investment Authority. Most of these malls will be over a million sq ft. The Aurangabad mall itself is over two million sq ft and is already pre-leased to retailers like Shoppers’ Stop, Westside, Croma, and Reliance Home. The Indore mall is spread over four million sq ft and the deal is likely to be sealed by mid-March. Prozone also plans to develop 12 malls over the next 3-4 years. While they have received a valuation of Rs 1,800 crore for four malls, they have received a valuation of over USD 1 billion for the remaining eight malls, primarily in two tier cities like Mysore, Surat, and Raipur. […]
Saravana Global Energy Limited (SGEL) today announced that the company has received equity investment from NYLIM Jacob Ballas India Fund III, LLC (“NYLIM JB India Fund”), a Mauritius based Private Equity investor. The USD 25 Mn funding was syndicated by MAPE Advisory Group. Commenting on the deal, Mr. Ajeeth P Challani, Managing Director, SGEL, said, “”We are pleased to be associated with investors of such a high pedigree. The investment is a significant milestone, and validates the strength of our company and potential of our business. Our relation with the investors will further enable us to achieve our vision of being a fully integrated, world class power equipment player” He further added that the investment would be utilized to finance the setting up of a new state of the art high voltage insulator manufacturing facility with a capacity of 24,000 tons per annum. The facility would help it to enter the hollow insulator segment. […]
Asian Development Bank (ADB) is likely to exit Petronet LNG Ltd by selling its 5.2 per cent holding in the country’s biggest liquefied natural gas importer possibly to promoters or billionaire Lakshmi Mittal. ADB and German Development Bank KfW had recently approved a loan of $169 million to Petronet for its expansion projects at Dahej and a new terminal at Kochi. However, ADB’s internal norms prohibit it from having both debt and equity exposure in a company. “In 2004, ADB had sanctioned a loan of $75 million to Petronet. But once it took a 5.2 per cent stake for less than $8 million, ADB could not disburse the balance of the loan due to its internal regulations,” Petronet CEO and Managing Director Prosad Dasgupta told the Press Trust of India. ADB norms also stipulate that it must divest its equity holding in a company three years from the date of the company going public. Petronet had an initial public share sale in 2004 and ADB was to exit Petronet in 2007, but it was persuaded to stay on for a year. […]
ICICI Venture’s cancellation of plans to invest $800 million (Rs 3,200 crore) in Jaypee Infratech and Kishore Biyani’s Indivision India Partners’ reluctance to go ahead with its $62.5 million (Rs 250 crore) investment in Dish TV are just two instances of a rather horrid picture for private equity deal flow in India. Industry sources say that there are a number of such deals where brakes have been slammed in the last minute due to the recent stock market meltdown. As a result, there’s a widening gap between what a private equity firm is willing to pay and what the promoters of the company are willing to accept. Blackstone and the private equity arm of Goldman Sachs are two firms that are said to have pulled deals, but DNA Money could not ascertain this. “I know of 8-10 other deals worth about $300 million that have fallen through,” said Gaurav Mathur, managing director, India Equity Partners, a $350 million India-dedicated fund that has made six investments so far. He was not comfortable disclosing names. […]
Private equity placements are finding favour with India Inc with the number of such transactions surpassing that of merger and acquisition deals in the first month of this year. Indian companies announced as many as 60 private equity deals as against 56 M&A transactions, according to the data compiled by global consultancy firm Grant Thornton. However, the total value of PE deals was lower at 2.05 billion dollars compared to $3.01 billion in M&As transactions. During calendar year 2007, the total number of M&A deals announced stood at around 661, while there were as many as 386 private equity deals during the same period. The major M&A deals in January this year were Tata Chemicals Limited's acquisition of US-based General Chemical Industrial Products Inc, and Great Offshore's acquisition of SeaDragon Offshore. […]
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