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Foreign investors may shun real estate

Foreign investors may shun the Indian real estate market as lower asset prices in the US and the potential to earn better returns skew the risk-reward equation against emerging markets such as India, say private equity experts. “Real estate developers face a double whammy of slowdown in the overall growth and hardening of interest rates, while the perceived risk-reward equation for India is going down,” said S Sriniwasan, CEO, Kotak Real Estate Fund. Take a pension fund in the US, which has the option to invest in the real estate in India or other markets. As the level of information is better in other markets, investors find it easier to take a call there. “These are existing assets, so there's no development risk unlike in India. Also, if they are investing at home, there's no currency or political risk compared to here. As they can make a return 18-20 per cent in the US, they are wondering if it is worth going to India for an additional 5 per cent,” said a real estate expert. Investors feel that the marginal higher return is not commensurate with the higher risk investors have to take here. These are early days yet, but this is reflected in the slowdown in decision-making for investment in India, pointed out experts. […]

June 18th, 2008

VCs now take a shot at defence sector

India Rizing Fund, a first of its kind venture fund for small and medium enterprises (SMEs) making defence equipment, has received the approval from FIPB and the government to kick off its plans to raise Rs 550 crore with subscriptions from foreign investors. The Mumbai-based fund, which is promoted by the former director and India head (specialist finance) at ANZ Investment Bank, Rajesh Narayan, plans to raise $100 million (Rs 400 crore) initially, keeping provisions to scale up investments by $200 million (Rs 800 crore). It has a 10-year duration, with an option to increase it by four more years. “Our first closing is likely to be in October and the final closing by December this year,” Mr Narayan told ET. More such funds may be created in the future for investment into the Indian defence production sector. The fund is close to tying up with about six foreign investors in their bid to raise money. […]

June 18th, 2008

Maneesh Pharma buys 51% stake in US firm Synovics

Mid-sized pharma firm Maneesh Pharmaceuticals has acquired 51% stake in US-based Synovics Pharmaceuticals for an undisclosed amount. It has become fourth Indian pharma firm after Sun Pharmaceuticals, Wockhardt and Glenmark, to acquire control of an American drug firm. Although senior officials in the unlisted Maneesh declined to give financial details, the Florida-based Synovics last year’s revenue totalled $30 million (about Rs 126 crore). Confirming the development, Maneesh Pharma MD Vinay Sapte said, “Synovics is a speciality pharma firm with a focus in OTC (over-the-counter) and branded drugs. They have a strong distribution network in the US. Since, we are a generic player, the deal make sense for us as we can then offer a mix of OTC, branded and generic products in the US.” Synovics has also a FDA-approved hormone drug manufacturing facility in the US, which would help Maneesh to operate in niche markets. The Rs 880-crore Maneesh had last year acquired Kopran’s OTC brand Symle for Rs 53 crore. […]

June 18th, 2008