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From the market participant’s point of view, research from KPMG points out that there are 255 active funds in India and many more heavyweights like KKR and Bain waiting to come in. So, the party is set to get bigger. In terms of sheer influence, PE nominees sit on boards of more than 1000 Indian companies and that includes some of the largest Indian companies like Bharti, Tata Teleservices , Idea and Pantaloon. The peripheral industry around PE is already worth more than $100 million and growing. The numbers may be small when taken in the global context, but for a sector that truly came on its own just four years ago, it’s a remarkable footprint. In the late 90s, you could count funds on your fingers – Baring , CDC Capital, Draper, HSBC Private Equity, Warburg Pincus, Chrysalis Capital. Now even I-bankers feign ignorance over some exotic sounding funds. It’s not an 800-pound gorilla yet, but it’s well on its way to becoming one. […]
Private equity (PE) firms seem to have sharply improved the fortunes of some of their investee companies. Data collected by Four-S Services — a research, financial consulting and business content services provider — show that companies with PE funding have performed much better in terms of operational efficiency vis-a-vis similar-sized non-PE backed firms. In India, private equity has moved on from being just a financier and stakeholder to expertise creator. It helps investee companies in a host of activities — forging strategic alliances, assisting in corporate governance and providing management advice. The Four-S Services study has found a positive difference in the sales growth of PE-backed and non-PE backed companies. Between 2002-03 and 2006-07, PE-funded companies witnessed sales growth of 27.5 per cent (four-year CAGR) compared to the 18.6 per cent growth for non-PE backed firms. […]
Bharti Airtel is learnt to be evaluating the option of forging a consortium comprising key MTN shareholders, the Mikati family and the employee-owned Newshelf, and possibly SingTel, in its bid for the South African telco. While the Mikati family and Newshelf through the Alpine Trust own 23% in MTN, it is believed that in addition, Bharti will try to negotiate an agreement with MTN shareholders to pick up 30% equity and make an open offer for another 20%. The consortium will thus hold around 74%. In return, a structure may be devised which will enable the Mikati family and Newshelf to indirectly hold shares in Bharti Airtel. The Bharti spokesperson refused to comment on the development. ET has been unable to obtain individual confirmations on these developments from Bharti Airtel’s top executives. A reliable source told ET that Bharti is looking at several options and will take its time before proceeding further. The Bharti top brass, including chairman Sunil Mittal, who met with top MTN officials earlier this week in London, have returned. […]
Steel coil and sheet maker Shree Precoated Steels Ltd, or SPSL, plans to sell 10-15% of its stake to a private equity fund to raise about Rs700 crore, said its managing director R.S. Ajmera. The publicly traded company is talking with potential investors including ICICI Venture Ltd, said an investment banker associated with the deal, who did not want to be identified. The deal size is not yet finalized, but a company executive who did not want to be named said the money raised could be Rs800-900 crore. The company expects to close the deal by end of May. DSP Merrill Lynch Ltd’s investment banking unit is advising the firm. SPSL’s promoters currently own 62% of its stake. Foreign institutional investors own 12%, with Citigroup Global Markets Mauritius Pvt. Ltd holding 1.18%, Merrill Lynch Capital Markets Espana SA 1.9%, and Passport Capital Llc. 4.9%. The company has a market capitalization of around Rs2,317 crore on the Bombay Stock Exchange. […]
Wherever there’s a whiff of money, they are likely to be the first ones on the spot. No surprise then that financial whizkids – whether from private equity (PE), investment banking or even conventional banking – are keeping close tabs on IPL. With IPL already worth close to $2 billion and teams needing to fork out close to Rs 600 crore every year combined, they are restless for a piece of the action. Most PE funds target 25-30% annual returns, irrespective of which way the market goes. Given the fanatical following cricket gets in India and the possibility that the league will be even bigger next year, the game, they believe, offers as a good an opportunity as the corporate world. While they’re proceeding with caution, they’re clear it is important to open their account in this game early. Arun Natarajan of Venture Intelligence, a private equity research firm, believes the IPL is a good fit for PE firms given that they tend to favour businesses that cater to a large mass of consumers. […]
Three private equity investors — Blackstone, New Vernon and Reliance (part of ADAG) have picked up equity shares and warrants in the Chennai-based Everonn Systems Ltd, a company specializing in e-learning and virtual classrooms. P Kishore, managing director, Everonn told TOI that the company has raised Rs 167.89 crore from the PE investors besides a equity warrant issue to the promoters. Deutsche Securities (represented by Reliance), The India Fund Inc of Blackstone and New Vernon will invest Rs 91.39 crore immediately. The promoters would pump in Rs 50 crore towards the warrant issue. In all the dilution would be around 9% of the company's equity. […]
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