Private equity (PE) investors, including early-stage venture capitalists, have poured more than $433 million (Rs1,775 crore) into environment-related businesses, primarily wind energy and clean fuel, in the country since 2001. The number, though minuscule in the context of the estimated $7 billion that was invested overall by PE investors last year, is a significant achievement for the cash-strapped sector. Investors and advocates said that closing investments in such businesses is still difficult but expect the pace to pick up in the next five years. So far, investors have put down an average of $33 million into companies that, for example, turn sugar into clean fuel or make cars that run on an electric battery. Overall, investments favoured wind energy, which saw four companies receive funding worth $224 million, and clean fuels, where five companies got $141 million (see accompanying table). A large portion of the investment dollars were focused on a handful of companies including Suzlon Energy Ltd, Aryan Coal Benefications Pvt. Ltd and Natural Bio-energy Ltd—two of which received more than one round of funding. A majority of the deals— 56%—were closed last year. This mirrors trends in the US market, where investments grew from $820 million in 2005 to $2.36 billion in 2006, according to Venture Power Newsletter on venture capital investment in clean energy. Most investors are driven by the domestic need for power and water in India, and making that energy supply sustainable as the country develops. “People are looking at India as a market for things, not as a source for things,” said Vineet Buch, principal at Menlo Park, California-based venture capital (VC) firm BlueRun Ventures. “Where there is a market, domestic supply will emerge.” But, there is also the potential for a broader market as the world continues to draws its attention to climate change and conserving the environment. […]

The ministry of corporate affairs has arrived at an understanding with the finance ministry on not using the criteria used in other sectors for regulating mergers in the banking sector. The size threshold for merging companies to seek the competition regulator’s approval would be appropriately raised for banks after the Competition Commission of India (CCI) gains experience, sources said. The corporate affairs ministry, which turned down a finance ministry proposal to the effect, introduced the competition amendment Bill, 2007, in Parliament last week, with a uniform threshold for all sectors. The understanding with the finance ministry is that it would be suitably modified to keep mergers that do not adversely affect consumer interest out of the purview of competition regulation based on the regulator’s experience. As per the existing norm, a combined entity with more than Rs 1,000-crore assets or Rs 3,000-crore turnover in the country should notify the regulator. In the case of entities having overseas presence as well, the bar is $500-million assets or $1,500-million turnover in the country and abroad taken together (in addition to separately meeting the local requirement). However, for foreign companies merging abroad and for group companies, there are separate thresholds. The government expects the competition regulator to be fully functional by April. The norm is set to come under sharp focus in the light of State Bank of India (SBI) merging its subsidiaries with itself and the global consolidation of banks that have a presence in the country. Banking sources say SBI’s move to acquire the smallest of its seven subsidiaries, State Bank of Saurashtra, is likely to trigger more M&As in the sector. […]