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Bollywood is beginning to enjoy the benefits of corporatisation. As the world’s largest film industry organises itself into a bigger and better-managed entity, it’s being helped along by a steady infusion of funds, not the least from private equity (PE) investors, who have been pouring money into sectors like infrastructure and real estate. Although PE activity was slack in 2007—and no one is willing to give out details—experts believe that the New Year may see a lot of development on that front. With the industry growing at a frenetic pace, everyone agrees that filmmaking in India is no more the job of an individual producer or financier. Second, the growth of the film industry has attracted PE players the most. Third, with the onset of corporatisation, foreign investors feel investment in the film industry is a safe bet. According to a study by FICCI-PricewaterhouseCoopers, the size of the entertainment industry, which was pegged at Rs 8,400 crore in 2006, is likely to double by 2011. So, how are PE funds being routed to the industry? Experts say equity is coming into the industry through both foreign and domestic routes. According to reports, some of the big film production houses are in the race for PE funds to fuel their business growth plans. The trend began last year when PE investors like 3i, Cisco and Oman International Fund invested Rs 552 crore in the media and entertainment house Nimbus Communications—producer of films like Sarhad Paar, which flopped, and the Sanjay Dutt-starrer Yakeen. PE funds have got more aggressive plans in the movie sphere in the future. […]
The $150-million early-stage technology venture capital fund, IDG Ventures India, and part of the IDG Ventures global network of venture capital funds, has announced its investment of $ 2.5 million in innovative network security and vulnerability management startup iViZ, founded by an IIT Kharagpur alumni who has introduced the world's first automated and on-demand penetration testing product. Kolkata-based iViZ has addresses the over $10 billion global security and vulnerability management market where losses due to identity theft in the US alone have been estimated at at annual $ 48 billion. The security and vulnerability management market has been growing annually at over 18 per cent. . ''It is our privilege to support iViZ founded by Bikash Barai and Nilanjan De,'' said Sudhir Sethi, chairman and managing director, IDG Ventures India. ''This investment is based on our thrust of investing in disruptive software product firms out of India with a potential to scale globally. Security is a key market for us. iViZ has built a highly committed and innovative team whose first product has already generated significant market traction and is well positioned to be a leader worldwide,'' iViZ received recognition as being amongst Asia's top five security startups in the Global Security Challenge held by London Business School in September 2007. The company plans to utilise the investment to build its sales team in North America, Europe, Middle East/APAC and India and to significantly enhance its product development initiatives. […]
Asia-focused British bank Standard Chartered said on Tuesday it plans to invest $50 million in Indian brokerage UTI Securities Ltd until 2010. It also said it has received the Reserve Bank of India's approval for its 49 per cent acquisition in UTI Securities. The bank has the option to raise its stake to 100 per cent in phases by 2010, it said in a statement. UTI Securities offers broking, wealth management and investment banking services across 60 cities in India. (Sify) […]
TV18 has acquired strategic control in Infomedia India and will buy upto 53% stake, reports CNBC-TV18. TV18 will acquire 40% stake from ICICI Venture and 20% via open offer. TV18 has acquired 40% stake from ICICI Venture for Rs 178 crore. Infomedia will issue 50 lakh fresh warrants to TV18 and 10 lakh fresh warrants to ICICI Venture. TV18 will make open offer for 20% in Infomedia at Rs 237.08 per share. TV18 has an option to buy up to 13% from ICICI Ventures if the open offer fails.(Money Control) […]
IDFC Private Equity, the private equity investment arm of infrastructure financing firm Infrastructure Development Finance Co. Ltd (IDFC), is raising a $600 million (Rs2,364 crore) fund, its third since it set up operations as the country’s first pure play infrastructure PE investor in 2002. The proposed fund has an upper limit of $700 million on the final corpus and is expected to close fund-raising in March 2008, said a person familiar with the development who did not wish to be named. The firm’s president & CEO Luis Miranda declined to comment. The third fund from IDFC PE comes at a time when pure play infrastructure funds (ones that do not invest in real estate), backed both by domestic and overseas investors, have become popular in the country. In October, UK’s 3i Group Plc. raised $500 million in the first close of its proposed $1 billion 3i India Infrastructure Fund. The fund has already invested $328 million across two deals—Soma Enterprise Ltd and Adani Power Pvt. Ltd. Separately, IDFC PE’s parent, the state-owned IDFC is itself in the process of closing first-round commitments for a mega $5 billion mega infrastructure fund, which includes debt and equity. Co-investors in this fund include Blackstone Group, Citigroup Inc. and the ministry of finance-backed India Infrastructure Finance Co. (IIFC). […]
Private equity firms may not have it going there way always, especially in the equity market space. Blackstone, the world’s largest PE group, which was listed recently, is having a tough time in the stock market. Blackstone was listed on June 22, 2007, at $35. From there it has been one downhill ride. It currently quotes at around $22, down 37% from its listing price. Blackstone’s IPO price was $31, its current share price is around 30% lower. Considering the IPO valuation was around $33.5 billion, investor wealth of around $10 billion appears to have been wiped out from the IPO price. Fortress Investment Group, the only other significant global listed PE player, isn’t doing well either. Fortress shares are down 42% from the date of listing in February 2007, though in Fortress case, the shares had shot up sharply on the listing day. Its current share is around the same as its IPO price of $18.5 per share. This underperformance in share price may not be linked to the company’s performance. Blackstone has delivered over 20% annual returns for around 20 years, which is around twice of the US market returns over the same period. But this just goes to show that even companies in the business of creating investor wealth can’t get it right always. […]
Business conglomerate Essar group is understood to have initiated discussions for acquiring 50% stake in a Kenyan refinery from international oil players as part of its move for a global footprint. The refinery in Mombasa, in which the government of Kenya owns a 50% stake, has an annual production capacity of about 4 million tonne. According to sources close to the development, Essar is looking to buy out the remaining 50% stake held by three global energy giants – Chevron, Royal Dutch and British Petroleum – in Kenyan Refinery and Petroleum. Essar is looking at this potential deal, the announcement for which is expected shortly, in pursuance with its worldwide expansion plans and it would further expand its presence in the African sub-continent. The group already has three exploration and production blocks in Madagascar and one additional block in Nigeria. […]
Volvo, the world's No.2 truck maker, said on Monday it planned to invest $350 million to expand in the fast-growing Indian market through a joint venture with Eicher Motors. Global truck makers are keen for a larger share of a market that is the world's fifth-biggest and is forecast to expand with improving infrastructure and new emission and safety rules. Volvo will buy 8.1 percent in Eicher Motors, India's third-biggest truck maker, giving it 50 percent in the venture, which has not yet been named and which will take on market leaders Tata Motors and Ashok Leyland. “This is doubtless a strategic position in the Indian market,” Nordea analyst Johan Trocme said. “It's not cheap, but I think investors will let that pass today, considering how exciting the investment is.” Nissan Motor Co has firmed up ventures with Ashok Leyland for light trucks, engines and transmissions. Daimler, which recently began assembling some Actros trucks locally, is scheduled to announce a venture partner shortly. Volvo will add its Indian truck sales business, valued at $75 million, and $275 million in cash to the venture. […]
Indiabulls Wholesale Services, the retail arm of Indiabulls Real Estate, has acquired Piramyd Retail, a company owned by the Ashok Piramal Group which runs 35 neighbourhood retail stores and seven lifestyle stores. Indiabulls Wholesale has acquired 63.92 per cent stake in Piramyd Retail at an enterprise value of around Rs 208 crore, said sources close to the deal. It will be making an open offer over the weekend to acquire an additional 20 per cent of the fully diluted paid-up capital of Piramyd Retail, at Rs 74.73 per share. Thus, it would shell out Rs 174.55 crore for 84 per cent stake in the company. Piramyd runs a lifestyle retail (Piramyd Megastore) and convenience store chain (Trumart) with 42 stores spread over 10 lakh square foot of retail space in states like Maharashtra, Gujarat, Rajasthan, Delhi, Punjab and Madhya Pradesh. […]
The spill-over effect of Vodafone’s battle with Indian tax authorities may prove costly for several other deal makers. The Central Board of Direct Taxes (CBDT) has reopened about 400 cases of big and mid-sized transactions that took place during the past six to seven years. According to sources close to the development, the cases include foreign corporates and PE firms selling stakes of companies based in India, and not paying any capital gains tax. One of the first such cases that the tax department is currently probing is Montreal-based Alcan Inc’s selling of the controlling stake in Indian Aluminium Company (Indal) to Hindalco Industries seven years ago, sources in the finance ministry told SundayET. Significantly, there were around 300 PE deals clocked in India in 2006 alone. The tax department had earlier slapped a notice on Vodafone Essar, demanding $2 billion as capital gains tax over its $1-billion acquisition of a majority stake in Hutchison Essar, India’s fourth largest mobile telephone company. The case is now locked in the Bombay High Court. […]
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