Foreign banks eye stake in Yes Bank

Two leading foreign banks have evinced an interest in picking up to 4.9% stake in Yes Bank. A tie-up would help Yes Bank add muscle to its trade-finance and cross-border transaction capabilities besides enhancing its global distribution reach, Rana Kapoor Chairman Yes Bank said.He, however, declined to divulge the names of the two foreign banks but said that "only American and European banks interest us presently." He denied reports that HSBC and Standard Chartered Bank had indicated any interest in Yes Bank.

Categorically ruling out ceding management control to any outside entity, Kapoor said that under no condition would the promoters' holding be allowed to drop below 30%. Presently, it stands at 34%.

The bank already has foreign holding with marquee investors holding stakes. While Netherlands-based RaboBank holds an 18% stake, Global Orient of Singapore holds 4.99%. Swiss Re holds 3.4%.

iGATE divests its professional services biz

IT and BPO services provider iGATE Corporation has decided to divest its Professional Services business. The divestiture will occur through a sale of the business or through a tax-free spin-off of the business to iGATE shareholders.

Commenting on the divestiture, Sunil Wadhwani and Ashok Trivedi, co-founders of iGATE, said: "This separation is a logical next step for the company. Our board has reviewed the divestiture and believes it will benefit our shareholders, employees and customers."They pointed out that the Global Solutions and Professional Services businesses operate in different markets with varied business models.

"The divestiture will better position each business to benefit from their growth opportunities. In addition, the shareholders of iGATE will benefit from the increased clarity of being a focused offshore services company. The demand for offshore IT and BPO services continues to grow at a rapid rate," they added.

In accordance with generally accepted accounting principles (GAAP), the company's historical and future financial results will now reflect the Professional Services business as discontinued operations, effective beginning as of January 1, 2008.iGATE has retained Credit Suisse Securities (USA) LLC to assist with the divestiture.

Read more in The Business Standard article.

Merrill hikes stake in Vakrangee to nearly 8%

Merrill Lynch has increased its stake in Vakrangee Software, an integrated document management and printing management solutions provider, to 7.72%. The total FII holding in Vakrangee Softwares is now 39.49%.

Dinesh Nandwana, chairman and managing director, Vakrangee Software, said: "With our strong positioning in the government and e-governance sector, we are also successfully tapping private and high growth sectors like telecom, insurance, financial services and retail. We have also ramped up our capacity by placing order on Eastman-Kodak for the acquisition of a state-of-the-art variable data digital colour printing facility to increase output from 2.4 million pages per day to 4.8 million pages per day."

Vakrangee reported a 107% increase in net profit at Rs 13.53 crore for the quarter ended December 31, 2007 when compared with Rs 6.54 crore in the corresponding quarter last year.

Disney to hike stake in UTV, invest Rs 805cr

The board of directors of UTV Software Communications, which met on February 16, approved a proposal to issue 9.35 million equity shares to The Walt Disney Company (Southeast Asia) at Rs 860.79 per share.According to a release issued by UTV to the BSE today, Disney will invest Rs 805 crore to hike its stake from 14.85% (by holding 3.40 million shares).

The deal is subject to the approval of shareholders and all regulatory approvals "including but not limited to the approval of the Foreign Investment Promotion Board for the subscription of equity shares by Disney in the company,"the release added.

The board also approved issue of 4.35 million warrants, convertible into 4.35 million shares to a promoter company, Unilazer Exports and Management Consultants, at Rs 860.79 per warrant. "The total investment by Unilazer in the company would be around Rs 390 crore," the release added.Unilazer Exports along with its promoters presently holds 30.67% of the equity share capital of the company through 7.02 million shares and 1.94 million warrants.

Related Story:Walt Disney on prowl for Indian acquisition

Read more in The Business Standard article.

SBI Cap to set up Rs 400cr VC fund

State Bank of India's subsidiary SBI Capital Markets plans to set up a $100 million (about Rs 400 crore) venture capital (VC) fund to invest in knowledge-based sectors in the country.The SBI Capital Markets has already entered into a 50:50 joint venture Softbank Investment Holdings of Japan for the fund.

The India Knowledge Fund will target specific India sectors including IT, knowledge process outsourcing, clinical research outsourcing, nanotechnology, online and mobile businesses, environmental technology and alternative energy, SBI said in its letter of offer filed with SEBI for its forthcoming Rs 16,736 crore rights issue.

The fund will invest primarily in unlisted, high growth companies through initial investments ranging from $3 million to $10 million.India Knowledge Fund will be co-managed by both SBI Capital Markets and Softbank Investment Holdings.Softbank Investment manages over 18 venture capital funds, making it one of the largest, most active venture capitalists in Asia.

Read more in The Business Standard article.

Ashoka Buildcon offloads 16% to IDFC for Rs 700 cr

In one of the major private equity deals in the country, infrastructure developer Ashoka Buildcon has offloaded 15.62 per cent stake to IDFC’s private equity fund for around Rs 700 crore.

The move is of significance, as apart from being one of the major pre-initial public offerings (IPO) deals, this values the unlisted company around Rs 4,500 crore.The promoters of Ashoka Buildcon has offloaded 15.62 per cent stake of the company’s equity capital, amounting to around 72 lakh shares, to IDFC Infrastructure Fund II.

The deal was sealed at Rs 980 per equity share, sources close to the development said.Pursuant to the stake acquisition, IDFC PE Fund’s stake rose to 18.18 per cent from the earlier 2.56 per cent it had bought in the Nashik-based infrastructure major.

Read more in
The Business Standard article.

Microsoft offers to buy Yahoo for USD 44.6 billion

Technology giant Microsoft Corp said on Friday that it had offered to acquire Internet media company Yahoo Inc for USD 44.6 billion in cash and stock.Microsoft said it had offered to buy Yahoo for USD 31 per share, which it said represented a 62 per cent premium above the company's closing stock price on Nasdaq on Thursday.

"We have great respect for Yahoo, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market," Microsoft Chief Executive Steve Ballmer said in a statement.

Yahoo was not immediately available for comment. Microsoft said it had identified four areas that would generate at least USD 1 billion in annual synergies for the combined entity.Yahoo shares rose 56 per cent to $29.95 in pre-market trading on Friday following the announcement. US stock index futures also jumped after the news was released.

SKS Microfinance raises Rs 147 cr via equity sale

Vikram Akula-promoted SKS Microfinance has recently raised Rs 147 crore through a third round of equity infusion.The investors include two new US-based strategic players, Silicon Valley Bank and Columbia Pacific, apart from the existing players like Sequoia Capital, Vinod Khosla and Odyssey Capital.

Silicon Valley Bank is a financial services company which is focused on entrepreneurial technology and life sciences companies for the past 25 years.

Columbia Pacific is a company involved in the healthcare space. The transaction was completed in December 2007 and the funds will be used to financing the microfinance institution’s expansion plans in 2008, said SKS Microfinance chief operating officer MR Rao.

Read more in The Economic Times article.

3 Ahemadabad ITcompanies to merge

In a first-of-its kind merger in Gujarat, three Ahmedabad-based IT companies are gearing up to launch a new company to cater to three different verticals – software, hardware and IT education – they specialise in individually.

The companies – Cubit Computers, Dev Information Technology and ACT Computer Education – are in advanced stages of merging into a new entity, which will receive funding from a US-based private equity firm.

The team from Cubit Computers, one of the pioneers in launching the tablet PC in the country, will head the hardware services vertical.

Dev Information Technology, which has undertaken a number of government projects in Gujarat, will head the software business, while ACT will spearhead the computer education services segment for the new entity.

Read more in The Business Standard article.