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Baring Private Equity Partners expects more Indian firms to tap private equity as markets and economies deteriorate further, limiting firms' ability to raise funds for expansion, a partner at its India unit said. Subbu Subramaniam told Reuters in an interview the credit crisis was also giving private equity firms bargaining power, enabling them to target listed and larger firms. “I can see that there is more pain to come in U.S. and because of that here also,” Subramaniam said. […] As buoyancy transformed into nightmare in the global financial market, Indian private equity players, for whom the exit through initial public offer (IPO) seems impossible, are exploring the ways to find an exit from their investments. Secondary deals, exercising drag-along rights and stake sale to FIIs, all of which are not so common in Indian PE scenario, are expected to increase in the recent future as floating IPO by the companies remain a fantastic idea in the current market tumble. In 2007, about 95 IPOs were floated, out of which 16 PE players made the exits. However, this year, as of today, about 9 PE exits were made out of a total of 36 IPOs. Two months back, through a secondary deal, Azim Premji had bought a 10% stake in Subhiksha. This transaction was done by Premji’s personal investment entity Zash Investments Ltd from ICICI Ventures, a private equity arm of ICICI Bank. Subhiksha has indefinitely deferred its IPO plan. […] In October 2007, Bangalore-based developer Nitesh Estates tied up with Citigroup Property Investors, the real estate private equity (PE) arm of Citigroup Inc., to set up shopping malls worth around $300 million (about Rs1,180 crore then) in Thiruvananthapuram, Chennai, Kochi and Bangalore over the next three-four years. Now, Nitesh Estates is looking for another partner or investor for the shopping mall venture, a senior company official said on Monday on condition of anonymity, because the decision to tie up with another entity hasn’t yet been made. Citi received a bailout on Sunday under which the US government agreed to protect the largest US bank from hundreds of billions of dollars in toxic assets and infused $20 billion of fresh capital. […] IJM (India) Infrastructure Ltd (IJMII), a subsidiary of IJM Corporation Berhad (IJM)-one of the largest and diversified construction groups in Malaysia, is looking at diluting its equity stake in matured assets to unlock some portion of investments for better cash flow. The company is open to the idea of offloading its stake to private equity (PE) partners. It has received several enquiries from serious domestic and international PE players in this regard. Speaking to FE, Teh Kean Ming, deputy chief executive officer and deputy managing director of IJM Berhad said, “we are looking at giving away a portion of our equity stake in some of the matured assets (projects that are completed), to unlock the value of the assets to a certain extent. The company is also willing to dilute equity in some of the ongoing projects. The value realised in this process, would be used to meet the capital requirements of the existing and future projects of the company. Equity dilution will happen only at the SPV level and not at the company level. IJMII will be a 100% subsidiary of IJM Berhad.” […] Indiareit, a real estate fund promoted by Ajay Pirmal has acquired about 15% stake in Mumbai-based developer Neptune Group for around Rs 3 billion, reports Economic Times. The fund has invested in the company instead of investing in individual projects which is the normal business practice. Neptune Group has presence in multiple areas of realty business and its association with companies of global repute – Foster+Partners are project architects for Neptune`s corporate park at Kurla – might have prompted Indiareit to go for an equity deal with it. […] Tata Chemicals through its wholy owned subsidiary Tata Chemicals Asia Pacific Pte Ltd, will invest Rs 180 crore over four years for a 35 per cent stake in JOil (Singapore) Pte Ltd, a jatropha seedling company set up by Temasek Life Sciences Laboratory Ltd. Tata Chemicals’ investment comes at a time when Tata Sons Chairman, Mr Ratan Tata, has warned of hard times ahead and told group companies to put on hold their acquisition and capital expenditure plans. In a letter sent to heads of the group firms and subsidiaries, Mr Tata has told to “put on hold any plans for acquisition unless considered strategically critical and also defer non-essential capital expenditure and capacity expansion.” […] Principal Financial Group, a leading US based financial group is looking to acquire an asset management company (AMC) in India as it wants to scale up its fund unit operations in the high-potential market, reports Business Standard. Investment bankers have already been told to look out for possible acquisitions especially those with large equity assets. The company feels that current market situation is best time to do an acquisition because of lower valuations commanded by the company. Principal Financial has three way joint venture with Punjab National Bank and Vijaya Bank, managing about Rs 70 billion. […] Suzlon Energy is exploring possibilities of selling part of its promoters’ stake in its unlisted Indian units to private equity firms, to raise money for buying Martifer’s equity stake in REpower. The Tulsi Tanti-promoted company, last month, postponed a Rs 1,800-crore rights issue that would have part-financed the Martifer stake buyout, estimated at about $338 mn (about Rs 1,690 crore), according to sources close to the development. Suzlon has 66% in REpower and has to acquire the Portugal-based Martifer’s 22.5% stake, as per an earlier agreement. […] |