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3i Group Plc, Europe's biggest publicly traded buyout and venture capital firm, said it plans to raise $1 billion for a fund to invest in Indian roads, ports and other infrastructure. The group said it will invest a minimum of $250 million in the fund and its unit 3i Infrastructure Ltd. agreed to commit the same amount. It will raise the remainder from third-party investors, the statement said. India's gross domestic product has expanded at a record 8.6 percent average pace since 2003, faster than any of the world's top 20 economies except China. The government plans to build $320 billion of infrastructure projects to ease bottlenecks that are constraining growth. […]
India’s second largest cellco by subscribers, Reliance Communications, today denied a newspaper report it was in talks with Maxis Communications to buy a controlling stake in the latter's Indian unit Aircel Cellular, according to Reuters. ‘There is no proposal or discussion for acquisition of either a controlling or minority stake in Aircel by Reliance Communications,’ a company spokesman said.(Telegeography)
Leading global private equity fund TPG Capital (formerly Texas Pacific) is talking to Indian budget carrier IndiGo. It intends to pick up a 10 to 15 per cent stake in the airline. If it materialises, the deal will be closed within the next few months, said investment banking sources. But Rahul Bhatia, managing director of InterGlobe Interprises, which owns the airline, said that the company was not looking at any dilution of promoters' equity. InterGlobe Enterprises and the former president and chief executive officer of US Airways, Rakesh Gangwal are joint promoters of IndiGo. Sources close to TPG maintain, however, that the private equity firm is exploring investment opportunities in the aviation sector in the country and Indigo is one of its target companies. “Airlines were forced to reduce fares even as aviation turbine fuel (ATF) prices went up and, valuation of the industry came down in 2006. Now it's time for consolidation, and global PE firms have a major role to play,” said a Lehman Brothers analyst. […]
Private equity major Blackstone’s acquisition of 50% stake in Gokaldas Exports is significant in that it is the first major buyout of a listed company. With a takeover of Patni Computers likely soon, PE players operating in India have started doing what they do abroad, acquiring controlling stakes in listed companies. So far the great majority of PE investments in Indian companies have been more akin to portfolio investments. The change agent, however, is the willingness of at least some Indian promoters to sell out and not a sudden increase in risk appetite of PE players. For PEs this makes sense. The value proposition, to use some jargon, that PEs bring to the table are primarily superior management skills. This includes perceived skills at cost cutting, improved supply-chain logistics and the ability to find clients using their global networks. […]
Sajjan Jindal-controlled JSW Steel Ltd has bought three steel firms in the US controlled by his elder brother Prithvi Raj Jindal for $900 million. The three firms are Texas-based Jindal United Steel Corp, Saw Pipes USA and Jindal Enterprises LLC. JSW will acquire 90 per cent stakes in these companies, while some of the existing shareholders will retain the remaining equity. The company will fund the acquisition through a recourse debt of $380 million to be raised against the guarantee of JSW Steel, and a non-recourse debt of $560 million which will be raised in the acquired companies. In a non-recourse loan, the borrower does not have direct personal liability, although there is a collateral. “The total enterprise valuation is $900 million and we are taking 90 per cent. So we will be paying $810 million for the 90 per cent stake, and we are investing $130 million towards the working capital of these companies,” JSW Vice Chairman and Managing Director Sajjan Jindal said. JSW has formed a 100 per cent subsidiary in US and Netherlands to raise finances to fund the acquisition. […]
NRI millionaire Karan Billimoria’s Cobra Beer is taking 76% stake in Regal Breweries, a joint venture with local partner NV Group promoted by prominent bottler and distributor Ashok Jain. Regal Breweries is coming up with a greenfield brewery at Patiala in Punjab with an initial investment of Rs 70/80 crore. This will be UK-based Cobra Beer’s first equity investment in India. The Patiala plant will have an initial capacity of 3.5 lakh cases monthly, but could ramp up later. Cobra Beer of Indian origin, a growing brand in UK made popular through the curry restaurants, has banked on contract bottling tie-ups for servicing the local market. Cobra Beer India COO Poonam Chandel confirmed the move to pick up 76% stake in a JV with Ashok Jain’s NV Group. Mr Jain is a spirits bottler with plants in Maharashtra, Goa and Haryana catering to MNC drinks giants like Diageo and Bacardi. The deal with Cobra marks his foray into beer. Meanwhile, Cobra is expanding its contract filling network. After starting with Mount Shivalik Group in Rajasthan, it has extended the bottling arrangements to Impala Brewery in Goa, Iceberg in Patna, Manav Breweries in Agra and Mikal in Orissa. Cobra is claiming monthly volume depletion of around 3 lakh cases and is projecting overall sales of over 2.5 million cases in FY08. […]
The New York-headquartered Lehman Brothers has picked up 26 per cent stake in ECL Finance, the non-banking finance company of Edelweiss Capital, for close to Rs 180 crore. The acquisition comes within days after Lehman Brothers bought the institutional broking business of Brics Securities, a Mumbai-based broking house. In March, the Mumbai-based financial services company Edelweiss announced its foray into the non-banking financial space and asset management by investing a total of Rs 400 crore in the new ventures. The NBFC would be looking at mortgage business and other credit instruments. R Balakrishnan, who will head the NBFC business, was appointed executive vice-president of Edelweiss. Lehman Brothers’ acquisition of a substantial stake in the NBFC is the latest in the string of investments by foreign companies in the Indian NBFC sector. Recently BNP Paribas bought 50 per cent stake in an arm of SREI Infrastructure, AIG Capital and bought 75 per cent in Chennai’s Vivek Hire Purchase. Barclays bought Chennai’s Rank Investments. […]
Greylock Venture Partners, the US-based venture capital firm with $2 billion under management, has made its debut in India. The firm, which has backed globally renowned companies including Staples, RedHat and Facebook, made its first Indian investment in TechProcess (formerly BillJunction) as a growth stage venture funding. Greylock is currently investing from its $500 million global fund. TechProcess was initially funded by ICICI Ventures in 2000. Over the years it developed expertise in transaction and payment processing services across a spectrum of industries in India. Its services include processing transactions (debit & credit) for telecom, insurance, mutual funds, credit cards, banks and non-banking finance companies. In the insurance sector, offerings include both centralised and decentralised services in account receivables, account payables and document processing. A representative of Greylock India declined to spell out details of the investment as TechProcess might announce the details shortly. Greylock, however, added that they were part of a consortium which invested in Techprocess recently. […]
Leading private equity investor Citigroup Venture Capital is in talks with Pyramid Saimira Theatre (PSTL) to invest about $100 million in the company. The money is being raised to implement the company’s film production plans as well as set up new theatres. PSTL is looking at producing 100 films annually. However, company officials said that the deal was almost through, and it is currently awaiting shareholder approval for the same. The investment would be made by way of preferential allotment. PSTL managing director P Saminathan declined to comment on an query emailed to him. Pyramid Saimira Theatre, a leading movie theatre chain in the country, operates in the southern states of Tamil Nadu, Andhra Pradesh, Karnataka and Kerala. It has also begun operations in Malaysia, becoming the first Indian company to have international presence in the film exhibition segment. The company has recently introduced the innovative biometric card strategy in their theatrical business to win customer loyalty. It has recently completed a $90 million foreign currency convertible bond at a conversion price of Rs 454 per share, listed on the Singapore Stock Exchange. The company is present in Malaysia through its joint venture Company called Pyramid Saimira Theatre Chain Malaysia Sdn Bhd. […]
After scouting for deals over two years now, buyout funds are finally making a headway in the Indian market. Blackstone’s acquisition of Gokaldas Exports comes a few months after it bought Intelnet and PE watchers. With a PE fund likely to take over Patni Computers, experts believe that buyouts are set to gather momentum in the country. “Over the next 2-3 years, buyouts will be the next big thing in private equity in India. We expect the opportunities to increase,” said Chrys Capital Senior MD, Ashish Dhawan recently. Chryscapital, which has just concluded fund-raising for its $1.25 billion fund, will actively look for buyout opportunities. Buyout specialists such as Blackstone, Carlyle, KKR and Apax Partners, which are known for buying companies rather than picking minority stakes, have been on the prowl for some time in the country. But so far, PE players have only participated in a handful of buyouts. US-based PE KKR set the trend when it bought a 85% stake in Delhi-based Flextronics Software Services for over $900 million. The other buyouts in India included WL Ross’s acquisition of textile company OCM India for $37 million, Navis Capital’s buyout of restaurant chain Nirula’s and packaging company Oriental Containers and Actis, snapping south India-based food group Nilgiri’s for $65 million. […]
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