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Profits posted by listed companies backed by private equity (PE) firms grew at nearly double the pace of the broader market in 2010, but the performance of their stocks has been mixed, with over half of them underperforming the Nifty. A Mint analysis of earnings at 67 PE-backed listed companies shows that aggregate profits grew 46% in the 12 months to 30 September 2010 from the year-earlier period. Profits made by the 50 companies that make up the Nifty rose 11% in the same period, while BSE 500 companies saw a 26% growth. The BSE 500 accounts for 93% of the market capitalization on the Bombay Stock Exchange. As December quarter results have not been declared, earnings of the year to September were considered for the analysis. The list of PE-backed companies was provided by VCCEdge, a financial research platform. […]
Jindal Poly Films (JPFL) plans to go for private equity investment in its subsidiary Jindal India Thermal Power. The BC Jindal-group promoted company may also go in for listing Jindal India Thermal once the company’s Rs 9,121-crore power plant in Orissa becomes operational. Jindal India Thermal’s 1800 Mw plant will have three units of which the first will be commissioned in March 2012, the second in September 2012 and the third in September 2013. “Before the project goes on on-stream, we will go in for PE investment or a public issue to unlock the value for JPFL. We are looking at 10-15 per cent dilution in the company,” Sanjeev Aggarwal, Chief Financial Officer, Jindal India Thermal, said. Jindal India Thermal has signed a second power purchase agreement with Tata Power Trading Company for sale of 400 Mw power from the plant on merchant basis for 12 years. With the signing of PPA, the company will sell a total of 900 Mw to Tata Power for which it has been guaranteed a minimum tariff of Rs 2.70 a unit besides getting a 10 per cent share in the upside. […]
Karbonn Mobiles, a joint venture between Delhi-based Jaina Group and Bangalore-based United TeleLinks (UTL), is reportedly in preliminary talks to raise Rs230 crore ($50 million) from two US private equity firms. The Times of India, citing unnamed sources close to the development, said that Karbonn Mobiles has held discussions with Accel Partners and Mount Kellet Capital to raise funds-valuing itself at around Rs2,300 crore ($500 million). Karbonn, which imports handsets from original design manufacturers in China, Taiwan and South Korea to help cut down on handsets cost, is planning to expand its factory in Bangalore in the future. Sudhir Hasija, MD of UTL told the paper, ''A lot of private equity firms are approaching us but we are not immediately interested in raising money. Maybe when we expand our mobile phone factory in Bangalore further and get good valuations, we will consider it.'' […]
American fund house KKR is likely to start an India focused USD 1.5 billion fund to invest across listed and unlisted Indian companies. Reports suggest that the fund would focus mainly on energy, power, infrastructure, auto components, brokerage houses and capital market infrastructure institution. KKR’s fund may also look at facilitating buyout deals in India. The America based firm is said to have already raised 25% capital for its India fund and is likely to close the fund by July-end. Presently, KKR founder, Henry Kravis is in India to monitor the India fund. Kravis has also met with Indian firms for investment opportunities. […]
Amtek Auto Ltd Monday acquired 10 per cent stake in Garima Buildporp Pvt Ltd. Garima Buildporp Pvt Ltd is the holding firm of OCL Iron and Steel Ltd. The deal is expected to enable Amtek Auto to source steel from Garima for manufacturing auto components. Garima Buildporp, a wholly owned subsidiary of Gateway Impex Private Limited, manufactures and sales steel and power generation. Garima has been undertaking a series of investments as it seeks to bolster its position in the market. In the financial year 2009-10, Garima Buildorp acquired 60.83 per cent stake in OCL from the outgoing promoters of the company – Ragu Hari Dalmia and R H Damia Trust and further acquired 15.38 per cent stake from the general public through open offer, which resulted in acquisition of 76.21 per cent stake in the company and subsequently became the holding firm of OCL. OCL Iron and Steel Limited, based in Rajgangpur in the eastern state of Orissa, manufactures and sells steel billets and sponge iron products in India. The company has captive iron and coal mines of around 5 million tonnes and 20 million tonnes respectively. It has a sponge unit with 20,000 tonne annual capacity and a 14 Mw power plant, working on waste heat produced by the plant. […]
India's Suzlon Energy said on Tuesday media reports of Spain's Gamesa picking up a majority stake in the Indian wind turbine maker were “speculative in nature and inaccurate”. Suzlon added in its statement to the stock exchanges that it had no clarifications to issue in this regard. Suzlon shares rose as much as 5.6 percent after Indian business TV channel CNBC TV-18 reported that Gamesa was likely to buy a majority stake in the firm. Separately, NDTV Profit channel said Suzlon's founding Tanti family may sell its entire stake of about 55 percent in the company to Gamesa's U.K. unit. […]
The end of 2010 witnessed one among the largest exits in the Indian private equity sector, wherein PE majors Actis and Sequoia together made a cool $500-million profit through the sale of portfolio firm Paras Pharma. The beginning of 2011 is set to witness another big-ticket M&A deal, in which General Atlantic is to exit Patni Computers. The deal size could be around $1 billion. These two mega deals remain strong examples of M&A being today’s preferred after exit route for PE firms in India than the conventional IPO route. Siddharth Shah, head of corporate & securities practice at Nishith Desai Associates, said, “One needs to bear in mind that besides the high notional valuation that an IPO may create in some circumstances, the certainty of being able to exit on account of liquidity, price realisation and regulatory constraints may make a trade sale or a strategic sale or an M&A exit a more real and profitable exit. Time value of money is also paramount for PE investors, as most of them invest with a certain time-specific horizon.” […]
Kohlberg Kravis Roberts and Co. (KKR), one of the world’s largest private equity (PE) firms, has started offering debt finance to Indian corporations to complete its suite of products. Globally, PE funds such as The Blackstone Group LP and Oaktree Capital Management LP do provide debt financing, but KKR has made the first move in India. KKR has completed four debt transactions worth around Rs.2,800 crore through its non-banking financial company (NBFC) KKR India Financial Services Pvt. Ltd, set up in 2009, while the PE arm has deployed at least Rs.4,600 crore across five deals. “The strategy is to be a multi-asset solutions provider,” said Sanjay Nayar, chief executive and country head of KKR in India. […]
Reliance Capital Ltd. Monday said it has acquired a 26% stake in Indian Commodity Exchange Ltd. from Indiabulls Financial Services Ltd., further strengthening its presence in India's growing commodity exchange business. The company, a part of the Reliance Anil Dhirubhai Ambani Group, has already set up a national commodity spot exchange and said it has been inducted as an anchor investor in the Indian Commodity Exchange, or ICEX. Reliance Exchangenext Ltd., a unit of Reliance Capital, has acquired the stake in ICEX, which is a screen-based online derivatives exchange for commodity trading. The companies didn't disclose financial details of the deal. […]
FMCG major Dabur on Monday said it has completed the acquisition of the US based personal care firm Namaste Group for $100 million (about Rs. 451 crore) in an all-cash deal. “The company's wholly-owned subsidiary Dermoviva Skin Essentials has completed the acquisition process by acquiring 100 per cent stake in leading personal care companies of Namaste Group, US,” Dabur said in a statement. In November last year, Dabur had announced that it is acquiring Namaste Laboratories LLC and its three subsidiary companies — Hair Rejuvenation & Revitalisation Nigeria Limited, Healing Hair Laboratories International, LLC, and Urban Laboratories International, LLC along with its South African arm. The acquisition has been done through the US-based subsidiary Dermoviva Skin Essentials, it added. […]
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