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Tight liquidity conditions may have dented private equity (PE) investments in large corporates, but closely-held family businesses in India are increasingly bringing in PE firms as strategic partners, backed by a growing trend among promoters that valuations need to be more realistic. Volume of PE deals in mid-sized family businesses has been growing sharply, according to senior executives of various PE firms. Most of the deals are in the process of being signed and are confidential. In the listed-entity sphere, PE investments could be in the $14 billion to $16 billion range, according to research firm Four-S Services. The research added that there have already been 84 PE/venture capital deals worth nearly $4.1 billion in the first two months of 2008. […]
The US-based PE fund Bain Capital PE, which has assets worth $40 billion under management, is setting up shop in India. Bain Capital, one of the top five PE funds in the world, has invested in companies such as Home Depot Supply and Burger King. It has appointed veteran in-vestment banker-turned PE investor Amit Chandra as its country head and MD for India operations. Sources say that Bain Capital is evaluating big India deals in the range of $100-200 million and would be setting up office in Mumbai. […]
Private equity (PE) giant Texas Pacific Group (TPG)-controlled Parkway Hospital in Singapore is leading the race to acquire 25-30% stake in Bangalore-headquartered Manipal Hospital for over Rs 500 crore, sources said. The indirect stake buy in one of India’s largest private hospital chains will also be TPG’s biggest play in the domestic market. Parkway, a luxury hospital chain with footprint across five nations in South East Asia, appears close to clinching the transaction pipping another strategic suitor and Thailand healthcare major Bumrungrad. Manipal hit the market for fund raising almost five months back, and received aggressive offers from a clutch of private equity players like Apax Partners, Actis and Sequoia. Following the Parkway acquisition four year back, TPG has been aggressively pushing the Singapore healthcare company, with medical tourism play, into new markets including China. The impending transaction may value Manipal Hospital at around Rs 2,000 crore, with India poised to play a big role in Parkway’s overseas strategy, sources added. TPG Capital has so far invested about $200 million in India, mainly across technology and consumer verticals. Its arm, TPG-Axon, which takes block positions in public companies and invests in real estate, has nearly $1 billion exposure in India. […]
German investment bank SachsenFonds (SF) has bought stake in four realty projects of London Stock Exchange listed, India-focussed realty fund Trikona Trinity Capital for Rs 607 crore ($150 million). Trikona has made returns of 115 per cent in the transaction. In the Delhi-based Uppal IT park, SF raised its stake from 8 per cent to 33 per cent. In the Hyderabad-based residential and retail project Manjira, SF picked up 41 per cent, thereby completely owning the project. In the MK Mall being developed by DB Realty in Mumbai, SF picked up 40 per cent and now owns 100 per cent of the mall. SF also took 15 per cent stake in Delhi's Luxor Cybercity, owned by Trikona. In another instance, Trikona and SF acquired 49 per cent in a redevelopment project in Bandra in Mumbai. The Mumbai-based Rustomjee Developers will undertake the development work, while SF and Trikona will contribute funds in the ratio of 55:45, Trikona said. Since SF is yet to set up its base in the country, Trikona is expected to manage all the assets. […]
Strong growth fundamentals of the country will help private equity investments to hit $16-billion mark this year and India is likely to remain a popular destination for the next few years, a latest report says. “PE investments might be in the range of $14-16 billion for CY08 and will remain a popular destination for 2-3 years along with China Brazil and Vietnam, Four-S Services, a provider of research, financial consulting and business content services,” said in its latest report. In the first two months of this year, as many as 84 PE or venture capital deals worth nearly $4.1 billion have been announced, the report added. Though investments in PE arena are flowing in 2008, it would be little ‘cautious', because of the downturn in the US economy, appreciating rupee, high oil prices, the firm said. (BS) […]
Baring Private Equity Asia said yesterday that it closed the Baring Asia Private Equity Fund IV, a $1.52 billion private equity fund. Baring Asia now has $2.5 billion in assets under advisory and this latest fund is three times the size of the Baring Asia III fund it closed three years ago. That has performed well, with a net IRR to investors of 126% as of March 31, according to Baring Asia. Baring Asia said Fund IV will deploy the same investment strategy it used in its previous fund, which means it will target growing businesses in Asia with enterprise values between $100 million and $500 million that require capital for expansion, recapitalisation or for M&A purposes. Baring Asia IV will target companies in the alternative energy, media, financial services, consumer and industrial sectors with operations primarily in China and India, but it will also look at companies in Japan, Singapore, Hong Kong, Taiwan or Southeast Asia. […]
The UK-based promoter-director Bhulo (Bhupendra) Kansagra of Delhi-based low-cost carrier SpiceJet is willing to divest the family stake in the airline if the valuations are right. The Kansagra family owns 12.91 per cent in the airline, which is publicly listed, and has a 10 per cent share in the Indian market, and a market capitalisation of $250 million. However, the company has been asking for a steep premium valuing the company at $600 million to $700 million. The SpiceJet stock started attracting attention a few weeks ago following a major spurt in trading volumes, which raised speculation of a promoter sell-out. Speaking to Business Standard from London, Kansagra said, “I am aware of media reports in India that SpiceJet is being wooed by several private domestic airlines but no one has come to me with a concrete offer […]
Kotak Mahindra Bank Ltd., the former partner of Goldman Sachs Group Inc. in India, plans to raise about $1.2 billion for two funds to invest in the world's second- fastest-growing major economy. Kotak will seek $1 billion to invest in infrastructure and will add $200 million from overseas investors to a third private equity fund that closed last month, Nitin Deshmukh, chief executive officer at Kotak Investment Advisors Ltd., said in an interview in Mumbai. 3i Group Plc, Deutsche Bank AG and Morgan Stanley are increasing alternative investments in India, where private equity firms raised seven times more than China in the first quarter. Kotak plans to have $2.5 billion in assets by the end of March by adding to holdings including Multi Commodity Exchange of India Ltd. and the National Stock Exchange Ltd. Kotak has made investments through two private equity funds, the India Growth Fund, started in 2005 with $160 million of assets, and the Kotak India Venture Fund I, started last year, that manages $65 million. […]
Bharti Airtel today said that it is holding discussions with South African telecom company MTN Group that are aimed at “combining the strengths of the two leading emerging markets players and, accordingly, is veering towards possible structures to achieve this objective”. The company also made it clear in a statement today that this may not require it to make any “bid” for MTN at all. Top bankers close to the deal said the statement is significant because it suggests that the two companies might look at a merger option (among other things) under which MTN shareholders could get a combination of cash and equity in Bharti Airtel in return for the Indian company acquiring control in MTN. It is not clear, however, how the merger would be structured, given that India has a foreign direct investment limit of 74 per cent and Bharti Airtel already has substantial foreign stakes from SingTel and other investors. […]
US-based telco billionaire Bhupendra Kumar Modi is expected to close the deal in June for buying out the 32 per cent holding of the Indian promoters in Sony Entertainment Television (SET) India for $320 million. This pegs the valuation of SET India at $1 billion. BK Modi is making the acquisition through Modi's company MCorp Global which has subsidiaries including mobile telephony service provider Spice Communications Ltd, technology retailer Hot Spot Retail Pvt. Ltd and mobile handset maker Spice Mobiles Ltd.In 2000, US-based private equity group Capital International had picked up 8 per cent stake for $200 million, valuing the company at $2.5 billion. The buyout will put at rest the long tussle between Sony Pictures Entertainment (SPE) and the Indian promoters who had even dragged the multinational giant to the Bombay High Court in February this year, questioning the board's capital call to its shareholders for infusing $40 million. The Indian promoters who include Sushil Shergil, Sudesh Mani Iyer, Rakesh Agarwal, Jayesh Parikh, Raman Maroo, BR Sule and film actor Jackie Shroff, were pressing Sony for listing the company through an initial public offering (IPO). They hold their stake in MSM through Atlas Equifin and Grandway Global Holdings […]
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