Lukewarm: VC investment grows 9% in '07

Venture capital (VC) investments in the country grew by a mere 9% in 2007, with $543 million invested across 98 deals. VC funds had pumped in $500 million across 94 deals in 2006.

Among the sectors attracting venture funds, IT and ITeS were followed by healthcare and life sciences, media & entertainment and telecom, the study indicated. Early stage investments dominated the scene and accounted for 66% of all investments during the whole year, the study said.

Information Technology (IT) and IT-enabled Services (ITeS) retained its status as the hot favourite among VC investors during the year, with 65 investments totalling $377 million, according to a study done by Venture Intelligence and US-India Venture Capital Association.Within IT and ITeS, business process ousourcing (BPO) firms attracted the maximum deals (in value terms), cornering about 29% of the share, followed by online services.

Read more in The Times of India article.

Tata Chemicals to buy US-based co for USD 1 bn

Tata Chemicals Ltd on Thursday said it will acquire US-based General Chemical Industrial Products Inc (GCIP) for over USD 1 billion.The company said it has entered into definitive agreements for acquiring GCIP for 1.005 billion dollar (approx Rs 4,000 crore).

GCIP is a leading producers of soda ash with a capacity of 2.5 million tonnes per annum with manufacturing facilities located at Wyoming, Tata Chemicals said in a filing to the Bombay Stock Exchange.

The US chemical company supplies essential raw materials used in the process of manufacturing range of familiar everyday products, such as glass, soap, powdered detergent, paper, textiles, and even food.Tata Chemicals also said the transaction is subject to the receipt of stockholder and other regulatory approvals.

Wockhardt cuts IPO price band on mkt woes

The volatility in the Indian stock market has forced Wockhardt Hospitals to revise the price band to Rs 225 (20 per cent at the lower end) and Rs 260 (16 per cent at the upper end) per equity share (from Rs 280 to Rs 310) for its initial public offering (IPO) of 25.09 million equity shares of Rs 10 each for cash at a price determined through a 100 per cent book-building process.The issue opens on January 31 and closes on February 5.

The Emaar-MGF management, on the other hand, has decided to stick to its price band of Rs 610-690 for 10.26 million shares.The issue will open on February 1. The IRB Infrastructure Developers issue of 51.06 million equity shares (which opens tomorrow) has a price band of Rs 185 to Rs 220.

The proposed IPO of Wockhardt Hospitals has been assigned an IPO grade of 4 out of 5 by rating agency Fitch Ratings India, indicating above-average fundamentals.Wockhardt Hospitals intends to utilise the proceeds from the issue to meet the cost of development and construction of greenfield and brownfield hospitals of the company, pre-pay some of the short-term loans and to meet general corporate expenses.The equity shares are proposed to be listed on the Bombay Stock Exchange and National Stock Exchange.

Deccan, Kingfisher to merge in 3:7 ratio

The Deccan Aviation board, at a meeting held today, appointed April 1, 2008 as the date for merger with Kingfisher Airlines.Subsequently, Deccan Aviation will be known as Kingfisher Airlines.

"Deccan Aviation shall allot shares in the ratio of three fully paid equity shares of face value Rs 10 each for seven equity shares of Rs 10 each held in Kingfisher Airlines," Deccan's release to the Bombay Stock Exchange said today.

The share entitlement ratio has been determined based on the recommendation of independent valuers KPMG India and Dalal & Shah.Deccan's charter business would be sold to an entity to be jointly owned by Captain Gopinath and the UB Group, the release added.

Madras Cements buyback at Rs 4,200/share

The board of directors of Madras Cements, which met today, approved a proposal to buy back shares at a maximum price of Rs 4,200 per share.The current market price is around Rs 3,831.

According to a release issued to the BSE today, the maximum amount for which the shares could be purchased (10% of the paid-up capital and free reserves) would be Rs 644.726 crore.The board meeting also declared a second interim dividend of Rs 10 per share of Rs 10 each for 2007-08.

"The company has commissioned, on January 20, 2008, an additional clinkering facility at its Jayanthipuram unit because of which the installed cement manufacturing capacity of the company has increased from six million tonne per annum to eight million tonne per annum," the release added.

Bartronics buys Proximities, SRG for Rs 200cr

Bartronics America, the wholly-owned subsidiary of Hyderabad-based solutions provider for automatic identification and data capture and Radio Frequency IDdentification (RFID), Bartronics India, has acquired the assets of Australia-based Proximities Inc and US-based SRG America Inc for a total consideration of $50 million (around Rs 200 crore).

Proximities Inc, a privately-held company headquartered in Melbourne, develops, markets and supports secure RFID cashless payment, access control and age verification solutions.Software Research Group Inc (SRG), headquartered in New Jersey, is a multi-national organisation that has successfully served the IT market place for over 10 years.

Ahmedabad Comm bourse up for sale

After India Bulls-MMTC's announcement of setting up commodity exchange, Kotak Mahindra Bank is all set to acquire controlling stake in the 50-year-old Ahmedabad Commodity Exchange (ACE).With capital infusion from the banking and financial services conglomerate, ACE will be the first regional exchange in India to be corporatised and de-mutualised national exchange. It would become a online screen-based exchange with technical upgradation.

Kotak Mahindra is picking up 51% equity stake in ACE at a price of Rs 321 per equity share. Though both Kotak and ACE remain tight-lipped about the development, a notice issued to the shareholders of the exchange says: “It is proposed to issue and allot to Kotak Mahindra Bank Ltd and/or its associates or subsidiaries upto 1,02,000 equity shares at a price of Rs 321 per equity share and upto 1,050,000 share warrants excersible to the extent of short falls in meeting the funding needs of the company through any issue/rights issue of equity shares within 36 months of from the date of allotment of the warrants at a price of Rs 321 per warrant exercised.”

Read more in The Times of India article.

Pepsi bottler to sell 10% stake to vencap

Pizza Hut, Kentucky Fried Chicken, Costa Coffee and Pepsi —-all have one thing in common in India.And that’s Ravi Jaipuria, who owns the master franchisee rights for all of them except Pepsi. For the US beverage giant, he is the largest bottler in India and neighbouring countries. Jaipuria is now lining up massive expansion plans for these brands.

First up, he will offload up to 10% equity stake in Devyani International, the company that holds the rights for all the above brands, besides Disney Artist, the store that sells Disney merchandise.

This equity dilution plus some internal accruals will fund Jaipuria’s ambitious Rs 450 crore expansion plans, which would take the total outlets under Devyani from 100 to 750 by 2013.Jaipuria confirmed that he is already in talks with venture capitalists to fund the expansion.

By 2013, there will be 205 (from the current 65) Pizza Hut outlets across the east and north markets in India, 300 (40) Costa Coffee joints, 37 (7) KFC outlets and 215 (20) of Disney Artist.

On the Pepsi front, Jaipuria has just bought a controlling stake in Pepsi’ Guwahati bottling plant and this acquisition has opened up the entire North-East market for Jaipuria’s beverage business.

Aditya Birla Grp in race for Jaffna plant

Ultratech Cement, an Aditya Birla Group company, has decided to throw its hat in the ring to acquire the five lakh tonne Kankesanthurai cement plant in Jaffna that has been closed for more than 17 years.

A delegation from the company was scheduled to meet government officials and plant representatives to chalk out the details over the management of the plant in the troubled northern Sri Lanka region.Holcim and Tokyo Cement have also been said to be eyeing the plant, but they have been deterred by the unrest in the region.

The Kankesanthurai plant, one of the first plants to be built in the island country, is located near rich limestone deposits in the Jaffna peninsula, devastated by hostilities between the Liberation Tigers of Tamil Eelam and government forces.Shares of state-controlled Lanka Cement rose 19 per cent last week, on speculation that the Birla group was interested in the Kankesanthurai plant.

Read more in The Business Standard article.

ICICI Venture invests Rs 95cr in Vikram Hosp

ICICI Venture has made an equity investment of $24 million (approx. Rs 95 crore) through Iven Medicare in Vikram Hospital (VHPL) for a "substantial stake".The investment would enable the Mysore-based Vikram Hospital to set up a pan Karnataka footprint, informed Aluri Srinivasa Rao, director, investments, ICICI Venture.

Iven Medicare, the health arm of ICICI Venture, would help VHPL, a family-owned business, to scale up its current infrastructure by offering dedicated support in key areas like Medical Informatics, quality and accreditation, HR practices, commercial and technology among others.Expansion plans included a mix of greenfield and brownfield initiatives.

Iven Medicare has invested $10 million in Delhi-based RG Stone Hospital, $15 million in Kolkata-based Medica Synergie and $36 million in Pune-based Sahaydri, Rao informed, adding that there were around seven similar deals in the pipeline.ICICI Venture has created a $250 million fund kitty for investing in 11 such deals. This kitty is part of the company's India Advantage Fund, Series-II.

Birla Group picks up stake in Core Projects

Making its debut in the country’s fledging private equity (PE) space, the Aditya Birla Group is picking up nearly 5% stake in Core Projects & Technologies, a leading IT solutions provider with special focus on education, health and BFSI.

In the second phase of its association, the Birla group will acquire equity in Core’s business with Indira Gandhi National Open University (IGNOU) and the state governments, which will be spun off into a separate entity.

To begin with, the Birla group will subscribe to preferential issue of 4.5 lakh equity shares or convertible warrants, representing a 4.99 % stake in Core, for Rs 13.5 crore. The issue will be priced at Rs 300 a share, nearly 22% premium over Friday’s closing price. The stock rose 9.89% on Friday to end at Rs 246.20.

Read more in The Economic Times article.

Pantaloon Retail to hive off Big Bazaar

The board of directors of Pantaloon Retail India, which met today, approved a proposal for setting up wholly-owned subsidiary companies for Big Bazaar, Food Bazaar, speciality retail business activities and property & mall management.

According to a release issued by Pantaloon to the BSE today, the meeting also approved a proposal to transfer the respective businesses of the company on a going-concern basis to the respective subsidiaries, subject to receipt of all requisite statutory and other necessary approvals.

NBC picks 26% stake in NDTV Networks

In order to expand its presence in the television entertainment space, Delhi-based news broadcaster NDTV has sold 26% stake in NDTV Networks to NBC Universal, leading international media and entertainment company, for $150 million (around Rs 580 crore).

As per the agreement with NDTV, NBC Universal can increase its stake to 50% in NDTV Networks by 2010.Last year, private equity investors had bought a 24% stake in NDTV Networks for about $120 million (around Rs 470 crores).(Related Story)

Through this association, NDTV will gain access to various television formats including talk shows of NBC Universal. Both companies will soon inititiate dialogues over the exchange of programming formats and shows.

Read more in The Business Standard article.

Bloodbath on Dalal Street, Sensex ends 1400 pts down

Fears of recession in the US becoming a reality saw global indices tumble. The worst to get affected in this mayhem was the Indian market.The bears went berserk on Dalal Street creating panic to such an extent that trading in Bombay Stock Exchange’s benchmark Sensex was halted briefly.

Sensex saw the biggest absolute fall in history by falling 2062 points intra-day. It closed at 17,605.35, down 1408.35 points or 7.4 per cent. It fell to a low of 16,951.50.National Stock Exchange’s Nifty plummeted 8.7 per cent or 497 points to close at 5208.80. It slumped to a low of 4977.10.

NTPC, down 15.07%, was the worst hit, followed by Reliance Energy (down 14.79%), ACC (14.53%), ACC (14.53%), Reliance Communications (13.84%), Grasim Industries (13.19%) and DLF (9.62%).

Bucking the trend, Satyam Computer posted nearly 5 per cent gains after the IT major reported a 29 per cent rise in consolidated third-quarter net profit on continued growth in sales and said it expects a 45-45.2 per cent increase in revenue growth in 2008 over 2007.

OnMobile to raise over Rs 450cr through IPO

OnMobile Global, plans to enter the capital market with an initial public offer (IPO) of 1.09 crore equity shares of Rs 10 each through a book building process in the price band of Rs 425-Rs 450 per share. The issue opens on January 24 and closes on January 29.

OnMobile a telecommunications value added software products and services, plans to use the funds for expanding its research and development team, foraying into international markets, merger and acquisition and to meet working capital requirements, repayment of loan and to fund expenditure for general corporate purposes.

The issue would constitute 18.99% of fully diluted post issue paid-up capital of the company. The equity shares are proposed to be listed on BSE and NSE.

Read more in The Business Standard article.

PE firms approach GoAir to pick up minority stake

Wadias-promoted GoAir has been approached by various private equity players for acquisition of a minority stake, while valuing the low-cost private carrier at $400 million (about Rs1,600 crore).Global consulting firm Ernst and Young, on behalf of other players, has approached the company and Wadias have held discussions with them, said a market source.

Private equity investors who have evinced interest in GoAir have valued the airline at $400 million. Sources said the valuation figure has been tabled by investors during a recently held meeting with the Wadias.However, the Wadias have not made any firm decision with regard to the proposal from PE investors.

Earlier, GoAir’s managing director Jeh Wadia had said that the airline has been receiving various equity proposals from PE investors and high networth individuals.
The GoAir management has been considering these proposals, but a decision is yet to be arrived at on these discussions.GoAir is also charting a major expansion plan and has started receiving the deliveries of the $1.2 billion order it had placed with Airbus last year.

Read more in The Live Mint article.

Great Offshore close to $ 500 million buy

Great Offshore Ltd (GOL), the Mumbai-based integrated offshore oilfield services company, has made an offer to purchase a controlling stake in an unnamed overseas company. The deal size, according to industry sources, is expected to be over $500 million (around Rs 2,000 crore).

The overseas company will own two semi-submersible drilling rigs (upon delivery) that are estimated to cost around $1.40 billion. At present, the sixth generation rigs are under construction.

The company was in advanced talks to acquire two Norwegian companies — Scorpion Offshore and Petrojack — for around $500-550 million, and had appointed Motilal Oswal as consultants. However, the name of the acquired company could not be ascertained.

Read more in The Business Standard article.

PTC raises Rs1200cr via placements

PTC India, the country’s leading power trading company, has raised Rs 1,200 crore through the qualified institutional placement (QIP) route.The company has allotted 7.41 crore equity shares of Rs 10 each at an issue price of Rs 155 per share aggregating Rs 1,199.94 crore in favour of qualified institutional buyers (QIBs).

The company intends to use the net proceeds of the issue for enhancing the capital adequacy, capitalisation of PTC Financial Services, investment in fuel intermediation, investments in entities in the energy sector along with meeting the working capital requirements.

ABN AMRO Securities and Kotak Mahindra Capital acted as the book running lead managers (BRLMs) for the issue. Post-issue PTC India’s paid-up capital has been raised to Rs 227.41 crore from Rs 150 crore.

Earlier, PTC India’s subsidiary - PTC India Financial Services Limited (PFSL), had placed 20% each with Goldman Sachs and Macquarie India Holdings(Related Story). PFSL is a non public deposit taking NBFC and has been set up to undertake investments across the Indian energy value chain.The FIPB has already granted PFSL the approval for equity participation from Goldman Sachs and Macquarie for up to 40% of the paid up capital of PFSL.

Blackstone may pull out of Eenadu deal

Blackstone, the world’s largest leveraged buyout firm, is close to scrapping its PE deal for Hyderabad-based media group Ushodaya Enterprises, owners of Telugu publication Eenadu, according to sources familiar with the situation.

The PE giant had recently reduced the size of its original $275-million deal for picking a 26% stake in Ushodaya, announced in January 2007, as it was not receiving the mandatory clearance from the Foreign Investment Promotion Board (FIPB) and the Cabinet Committee of Economic Affairs (CCEA). Blackstone had subsequently reduced the size of the proposed deal and under the revised terms, it was looking to acquire a 14% stake for Rs 590 crore or a little less than $150 million in Ushodaya Enterprises.

As per the process followed by the Indian government, the proposed investment by Blackstone now awaits final clearance from the finance minister, which is usually just a formality after the FIPB gives its green signal. Sources say despite the imminent clearance, Blackstone is likely to pull out of the transaction.

Read more in The Economic Times article.

Related Post:
Blackstone scales down investment in Ushodaya

BSNL plans mega-IPO of Rs 40,000 crore

State-owned Bharat Sanchar Nigam Ltd (BSNL) is preparing for the country’s largest initial public offering (IPO) of around $10 billion (Rs 40,000 crore) slated sometime next year.The issue has been discussed by the board and is awaiting government clearance.

The plan is to divest 10 per cent through the IPO, which values India's largest telecom company at $100 billion (Rs 400,000 crore), which is larger than the combined market capitalisation of Bharti Airtel at $46 billion (Rs 183,283 crore) and Reliance Communications (RCom) at $41 billion (Rs 163,683 crore), respectively the second- and third- largest telecom companies.

The plan that it might go public was announced by Communications Minister A Raja on the sidelines of a press conference at which BSNL announced an insurance cover for 33.7 million of its subscribers.

The announcement comes a day before the $3 billion (Rs 11,500 crore) IPO by Reliance Power, owned by the Anil Dhirubhai Ambani Group, the largest initial share offering to date.

Read more in The Business Standard article.

Essar unit buys 50% stake in Kenyan refinery

Essar Energy Overseas, a subsidiary of Essar Oil, has entered into an agreement to acquire 50% stake in Kenya Petroleum Refineries (KPRL), a four million metric tonne per annum (MMTPA) refinery, in Mombasa, Kenya.This will be Essar Oil's first international acquisition in the refining sector.The government of Kenya holds the remaining 50% in KPRL. The company has not disclosed financial details of the deal.Essar already has three exploration and production blocks in Madagascar and one in Nigeria.

The Mombasa refinery is planned to be upgraded by adding secondary units at a cost of $400- 450 million. The government of Kenya and Essar Energy Overseas will share the cost of upgrading the refinery.

Essar will acquire the KRPL stake from existing shareholders - The Shell Petroleum Company, Chevron Global Energy Inc and BP Africa. Subject to certain conditions, the acquisition is expected to be completed in early 2008

NIIT signs deal to buy 48% stake in Evolv

NIIT has signed a share purchase agreement to acquire 47.87% stake in Noida-based Evolv Management Services (Evolv) - a provider of English language and communication training - with 100 employees and pan-India presence and delivery capability.Evolv provides training services to clients across IT and ITeS, banking, insurance and telecom.

Evolv has developed over 50 specialised courses, and a library of modules for providing training in English and communication. The courses include accent neutralisation, fluency and expression, cross-cultural communication, presentation skills, business writing, assertive communication and conversational skills. The courses can be customised to be delivered to working professionals from different industries, functions and levels.

SBI rights at a 35% discount

State Bank of India, the public sector banking giant, has priced its rights issue at a 35% discount to its closing price on Friday.The bank, 59.73% government-owned, will raise Rs 16,736 crore by offering one share for every five held at Rs 1,590 apiece, a discount to its Rs 2,437.25 stock price on January 11. The cut-off date for the issue is February 4.

The discount should act as an extra incentive for investors of the bank which has seen its stock price soar 101% in the last one year — from Rs 1,222 to Rs 2,462 currently. The stock closed at Rs 2,462.25 on Monday.

Sources said the bank plans to sell over 10 crore shares, of which 86 lakh will be reserved for employees holding shares of the bank, the first such instance among public sector banks.

Officials said the price of the issue was arrived at using the one-year average, which came to Rs 1,533 per share.

The bank’s capital will grow to Rs 650 crore from the existing Rs 526.30 crore.Analysts said a lower discount could possibly allow the bank to raise more money, but the discount will ensure that the issue will “cruise through”.

Read more in The DNA Money article.

ICICI Venture arm to invest Rs65 crore in Medica Synergie

I-Ven Medicare, a special vehicle for investments of ICICI Venture, will invest Rs65 crore in Medicare Synergie Pvt Ltd, a healthcare chain based in the eastern region.
Announcing this in Kolkata today, director ICICI Venture and I-Ven Medicare Aluri Srinivasa Rao told reporters this was the first round of financing in Medicare Synergie. A second round of another Rs65 crore would be done in 18 months, Rao said.
He said the I-Ven Medicare would make an exit after a period of three to five years in the healthcare chain.

About I-Ven Medicare, Rao said the vehicle would invest in 12 healthcare projects across the country.He said I-Ven was talking to a strategic partner for picking up stake in the vehicle.The total kitty size of I-Ven would $ 250 million, out of which $ 90 million would be raised as debt, and the balance shared equally between the two.
Chairman and managing director, Medicare Synergie Alok Roy said his company would set up eight hospitals in the eastern region including Kolkata, at a cost of Rs270 crore.
Medicare Synergie plans to have 2,400 beds in one year, he said.

UK fund picks up 19% equity in Quality Care

Ashmore Funds, UK, a global investment fund has picked up 19 per cent equity in Quality Care India Ltd (QCIL), the holding company of CARE group of hospitals for a consideration of Rs 90 crore.

The Hyderabad-based QCIL has divested the stake to part fund its Rs 150-crore, phase-I expansion, which would see the doubling of its bed strength to 2,000 by the end of March. The balance Rs 60 crore is being raised through debt from banks and internal accruals.

QCIL, which owns the CARE group of hospitals, has already lined up hospitals in Nagpur, Bhubaneswar, Raipur, Kochi, Visakhapatnam and Pune, with a minimum bed capacity of 100 each, as part of the expansion, said Dr N. Krishna Reddy, Director and Chief Executive Officer of CARE group.

Read more in The Hindu article

Pearl Fashions to acquire 75% in Hong Kong-based Simple Approach

House of Pearl Fashions will acquire 75 per cent stake in Hong Kong-based marketing company, Simple Approach. The acquisition will benefit Pearl Fashions in expanding its customer base into high fashion, mid-market segment.

Simple Approach supplies to mid market retailers in the UK and US. The company is expected to clock revenue of Rs 80 crore in the current financial year. It is expected to grow to Rs 100 crore in 2008-09 and to Rs 200 crore by 2010-11.

Pearl Fashions plans to leverage on Simple Approach's sourcing capabilities to offer wider product range at very competitive prices. This, the company, expects will help achieve 25 per cent annual growth in its business every year for next three years.

Pearl Fashions is looking at entering fashion retailing in India with plans of launching German brand, Lerros.

Clear Investments , PFC to float $1 bn PE fund

US-based Clear Investments and government-owned Power Finance Corp (PFC) have joined hands to float a $1-billion private equity fund for the Indian power sector. Their plan is to increase the size of the fund to $10 billion by 2012 with the sector entering the boom phase in the country.

PFC, which was appointed as the advisory to the investments, has evinced interest in picking up 20% stake in the power fund. PFC has submitted a letter of intent (LoI) to invest $200 million, according to Deepak Kavadia, managing director of the parent company Clear Trade.

The fund, which has an advisory board in India, will invest $250 million to pick up stake in Indian power companies through pre-public offering by March 2008, said Mr Kavadia.

Read more in The Economic Times article.

Red Fort launches $250 million domestic fund

Red Fort Capital, an international private equity firm, has launched its first domestic fund of $250 million (Rs 1000 crore) targeting deals in the real estate space. The fund will focus on land and realty projects worth over Rs 5000 crore in the next one year.

The investment will be made in under-valued land for residential, commercial, IT, retail and hospitality projects, focusing on redevelopment projects in Mumbai and affordable housing and land in key urban centres.

Last year, the company had committed investments to a number of land and real estate projects worth over Rs 7,500 crore, partnering with the Bangalore-based Prestige Group and Indu Projects in Hyderabad.

Read more in The Business Standard article.

NDTV in talks with NBC for stake sale

Indian television company NDTV is in advanced stages of negotiations with NBC Universal, a subsidiary of New York Stock Exchange-listed General Electric to sell between 25 and 30 per cent in its UK-based subsidiary NDTV Networks Plc.This would be NDTV’s first strategic partner in the broadcasting business if the deal, valued at between Rs 650 crore and Rs 800 crore, goes through.

NDTV Networks is the umbrella organisation for group companies such as NDTV Imagine (a Hindi entertainment channel), NDTV Lifestyle (an English TV channel), NDTV Convergence (web and mobile company) and NDTV Labs (software and technology company).It also holds a 50 per cent stake in NGEN Media Services Pvt Ltd, the 50:50 joint venture with Genpact for NDTV’s media process outsourcing business.

Read more in The Business Standard article.

SBI, ICICI buy 3% in Jaiprakash Power Ventures

State Bank of India (SBI) and ICICI Bank have together acquired 3% in Jaiprakash Power Ventures (JPVL), a wholly-owned subsidiary of Jaiprakash Associates (JAL), for Rs 400 crore in first of two private placements before its initial public offer (IPO).

This would be followed by another pre-IPO placement before the firm hits the market with a public offer, together raising Rs 3,500 crore.The company will dilute another 17% through the private placement and IPO.Of this, the pre-IPO deal is expected to be for about 3-4% of the equity, while the rest would be through the public offer. SBI and ICICI are supposed to have paid a little over Rs 230 per share.

JPVL is looking at a valuation of $5.5 billion, post-IPO. Following the IPO, the shareholding of Jaypee group in JPVL would come down to 80%.

Read more in The Economic Times article

Citi arm may buy Rs 400 cr PINC stake

Citigroup’s private equity arm Citigroup Venture Capital International (CVCI) is close to acquiring an equity stake in Mumbai-based brokerage house PINC (Pioneer Investcorp) for about Rs 400 crore as deals in the broking industry continue the momentum into the new year.According to sources Delhi-based Chryscapital and Sequoia are the other two private equity funds that are in the race for the stake.

If the deal goes through, this will be CVCI’s third investment in a broking outfit and the first during this calendar year. Last year, CVCI bought a majority stake in retail brokerage Sharekhan(Related Story) for $174 million and another about 20 per cent stake in Anand Rathi Securities(Related Story) for $20 million.

PINC, a stock market-listed company, is promoted by the Gaurang Gandhi family. The promoters hold about 45 per cent stake in the company, employees hold about 15 per cent and the remaining equity is held by the public.

Sources close to the development said initially CVCI would be investing about Rs 170 crore in PINC and the remaining amount would come during the second round of funding. The total valuation of the company is about Rs 800 crore.

Read more in The Business Standard article.

ICICI Bank eyeing I-Sec IPO: Traders

India's most-valuable lender, ICICI Bank, may be planning an initial public offer in its investment banking and broking unit, traders and analysts said on Monday, sending its shares soaring more than 6 per cent.A spokesman for New York-listed ICICI said it was exploring various opportunities for its subsidiaries and that an announcement would be made if there was any decision.

The bank held a meeting for a group of investors on Monday, and traders said that was the source of the IPO talk in ICICI Securities, which lifted the stock from a 3.9 per cent early fall to end up 6.1 percent at a record close of Rs 1,363.90 ($34.7).

ICICI Securities offers services in corporate finance, fixed income and equities and operates out of Mumbai with offices in New Delhi, Chennai, Kolkata, New York, London and Singapore, according to its Web site. It also has a subsidiary in the United States which is a member of the National Association of Securities Dealers Inc and is registered with authorities in the United Kingdom and Singapore to offer corporate advisory services.

Read more in The Economic Times article.

Marksans Pharma acquires UK`s Bell, Sons and Co

The UK-based subsidiary of the company, Marksans Pharma (UK), has entered into a definitive agreement with Hale Group, the parent company of Bell, Sons and Co (Druggists), to acquire the latter, Marksans said in a filing to the Bombay Stock Exchange.Marksans would have access to 34 product licenses of Bell, following the acquisition.

“The acquisition is in line with Marksan’s global strategy. The company now has a presence in two major countries, UK and Australia, for which it holds manufacturing approvals,” Marksans Managing Director Mark Saldanha said.He further adds that “The acquisition of Bell will further increase the company’s revenue and earnings contribution from the regulated markets. With the acquisition, the company’s global revenues from the regulated market are expected to cross 50 per cent of its total revenues,”.

Bell, Sons and Co, which manufactures and markets over the counter (OTC) pharmaceutical products, is approved by the UK Medicines and Healthcare Products Regulatory Agency.

Read more in The Business Standard article

Blackstone scales down investment in Ushodaya

Global private equity player Blackstone Group has reworked its investment proposal and will now invest less than Rs 600 crore in Ushodaya Enterprises, the company that owns leading South Indian newspaper Eenadu.The reworked proposal was submitted to the Foreign Investment Promotion Board (FIPB) recently, in which the private equity major now proposes to pick up around 14 per cent stake (as against the earlier 26 per cent for Rs 1,081 crore).

The reduction in Blackstone’s investment would obviate the need for the proposal to be vetted and cleared by the Cabinet Committee on Economic Affairs (CCEA). As part of existing Government policy, all proposals which have a foreign direct investment of over Rs 600 crore have to be finally approved by the CCEA.

Blackstone’s new proposal will be vetted at the FIPB itself, a process that should speed up approval. There is a sense of urgency surrounding the deal and the parties concerned are keen to wrap up the deal by February.

As per the original proposal, announced last January, Ushodaya planned to raise $465 million, with Blackstone investing $275 million and $190 million raised through bank financing. The deal was stuck for nearly a year on account of several objections raised to the proposed transaction.

Read more in The Business Standard article.

REL, GMR in race for Singapore co

Singapore's state investor Temasek has chosen nine firms including Marubeni and HongKong Electric as bidders for Tuas Power, which could raise $2 billion as part of the city-state's energy liberalisation. The sale of Tuas will be the first of three power generators that Temasek Holdings hopes to sell by June 2009, which analysts say will offer potential investors a low-risk route to steady profits.

Sources close to the deal named six bidders: Japan's Marubeni, Li Ka-shing's Hongkong Electric, India's Reliance Energy, a joint venture of Macquarie, and India's GMR Infrastructure, Malaysia's Tanjong and Huaneng Power.

A third banking source advising one of the bidders said that there could be nine shortlisted firms in total, including the One Energy JV owned by Hong Kong's CLP Holdings and Japan's Mitsubishi, Bahrain-based investment bank Arcapita and Spain's Union Fenosa.

Read more in The Times of India article.

Canara Bank eyes buyouts this year

Public sector Canara Bank has hinted that during the current year it may acquire a bank which can increase its footprint in the North and West India.Speculations are rife that Canara Bank had evinced interest in taking over Mumbai-Dena Bank, which has strong base in Northern and Western India.

On the issue of funding of any possible acquisition, Rao, CMD Canara Bank said Canara Bank has been one of the strong banks with good fundamentals. There is no problem as far as capital for acquisition is concerned, he said. The bank, in which the government holds a 73% stake, could consider acquiring a bank having government stake of about 51%.Later Rao added that the bank is looking at expanding its footprint in the North and West India, as it already has a good network of bank branches in the south.

Read more in The Times of India article.

Daimler to buy 26% in Sutlej Motors

Daimler AG of Germany has taken a call option to buy 26 per cent in Jalandhar-based bus body builder Sutlej Motors.The proposal was recently cleared by the Foreign Investment Promotion Board (FIPB).

The Indian company had signed an agreement with Daimler last year to jointly make fully-built buses from Daimler’s Chakan facility based in Pune.Under the agreement, Daimler will produce and supply bus chassis and Sutlej Motors will attach the body.

Daimler India, which is a 100 per cent subsidiary of Daimler AG, will also handle sales and after-sales services of the coaches, which are expected to be launched in India in the first quarter of 2008.

Gateway to raise Rs 300 cr for rail freight subsidiary

Logistics provider Gateway Distriparks (GDL) is planning to raise Rs 250-300 crore by way of private equity for its subsidiary, Gateway Rail Freight.The company has appointed Kotak Bank as the merchant banker for the private placement.

The company will dilute around 15-20 per cent stake to the investor and the deal would be closed in two-three months.Gateway Rail Freight, an unlisted company, was planning to invest around Rs 1,000 crore in its rail and hinterland terminal business and acquire 30 rigs in next two years. It may list on the bourses, as well.

The company runs six freight trains and intends to double this to 12 by the end of this financial year. Starting next year, the company would add two freight trains every month.

The parent company, GDL was also planning to invest Rs 500 crore in rail logistics subsidiary in the next three years. It will make an initial investment of Rs 150 crore in acquiring rolling stock, including axles, wheels and wagons.

ICICI venture firm acquires Alved Pharma

ICICI venture firm, RFCL Ltd, today said it will acquire Chennai-based veterinary healthcare firm Alved Pharma and Foods Pvt Ltd for an undisclosed amount.RFCL has signed a definitive share purchase agreement to acquire Alved Pharma, which would see transfer all key people, assets, all contracts including exports and the brand name, the ICICI Venture firm said in a statement.

The company said that this acquisition complements the animal healthcare business of Vetnex, the veterinary wing of RFCL, in terms of product profile and distribution network.Last year, RFCL had acquired Wipro Biomed and Godrej Medical Diagnostics.It expects the animal healthcare business of Vetnex to close at Rs90 crore for FY08, with a growth of 22% over FY07.

Read more in The LIve Mint article.

TutorVista to raise Capital in India

TutorVista, the firm that has pioneered online tutoring to students in the West from India, is coming home. It is now rolling out a major Indian business plan for which it will raise $15 million, virtually the same as the $15.25 million which it had raised earlier for its global rollout from the likes of Sequoia Capital.

The funds to be raised will enable three initiatives: ramp up Edurite, the learning content firm TutorVista acquired in November; launch a network of technology-led brick and mortar learning centres across the country; and offer an integrated learning platform, much like what it is delivering to students in the west.

The student will not see the tutor but speak to him and hear him through a headset, and the two will use a computer screen whiteboard, half used and written upon by the student and the other half by the teacher. The rates have not been frozen yet but Indian students are likely to be charged Rs 25,000-40,000 per year, for eight hours of coaching a week.

TutorVista which began 26 months ago now has 10,000 registered students and 850 employees who include 600 teachers operating from 23 Indian cities.About 90 per cent of the students are in the US, 500 are in Korea learning English and the rest are in the UK.

Read more in The Business Standard article.

ADAG floats Tech Reliance for IT debut

The Reliance Anil Dhirubhai Ambani group (ADAG) is foraying into the information technology consulting and services segment, for which it has formed a subsidiary, Tech Reliance.The group is also looking to poach management- and senior-level executives from major IT firms in the country.

The group is planning to bring in all its IT departments under the subsidiary. Tech Reliance, apart from providing services to the group companies, will also provide services to diverse industry sectors in the country.The planned services would include consultancy, business process outsourcing and software development, among others.

The company will initially look at providing services to industry sectors such as telecommunications, financial services, utilities, entertainment and healthcare.
The company intends to take on existing IT biggies, including Infosys Technologies, Tata Consultancy Services, Wipro, IBM and Accenture, by providing similar services in the country.

Read more in The Business Standard article.

Govt refuses to bail out MFL

In a major setback to the government’s programme to restructure ailing PSUs, the finance ministry has rejected a proposal to give financial assistance to revive Madras Fertilizer (MFL). MFL is one of several PSUs seeking funds from the government.

In the case of MFL, the finance ministry’s stand could mean virtual closure of the company that has been reeling under severe losses for the past few years. The restructuring package for the company was finalised by department of fertiliser (DoF) and sent to the Cabinet Committee on Economic Affairs (CCEA) for approval.

MFL has got accumulated losses of Rs 513.7 crore which may go up to Rs 665.57 crore by the end of the fiscal 2007-08. The paid-up capital of the company is Rs 161 crore.

Read more in The Economic Times article.

PTC to divest 40% in its arm

PTC, formerly known as Power Trading Corporation, has raised Rs 155.74 crore by diluting 40% stake in PTC Financial Services (PFS) to Goldman Sachs and Macquarie India Holdings.

As part of the agreement, the two financial investors acquired 20% stake each at Rs 16 per share which is 60% premium to the face value of the shares and pegs the company’s valuation at Rs 389.35 crore.

The firm has already picked 26% stake in Indian Energy Exchange, the country’s first power exchange. In addition, PFS is expected to invest in greenfield and brownfield power generation assets, power transmission and distribution assets, apart from energy related infrastructure assets such as gas pipelines, fuel linked ports and electricity equipment.

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