MBD in talks with PE funds, may sell up to 49% equity

Delhi-based publishing house MBD Group is in talks with international private equity firms to offload equity in its mixed-use development MBD Zephyr in Bangalore, as it tries to raise funds in a nervous and choppy market.The mixed-use development, which is expected to be completed by 2011 will have a luxury hotel, space for luxury and premium retail, and entertainment spaces.The company is looking at offloading between 26% and 49% equity in the retail portion of Zephyr, which is spread over more than 80,000 sq. ft.

The eight-acre MBD Zephyr project at Whitefield near Bangalore is targeting luxury brands such as Gucci, Versace, Louis Vuitton and premium ones such as Debenhams, Zara, Mango and Body Shop. Zephyr will also have a 450-room luxury hotel owned and managed by the MBD Group.The private equity investment will be completed after eight months once the tenant mix in Zephyr’s retail portion is finalized

Read more in The Livemint article.

Hindujas eye French giant Valeo

The Hinduja Group, promoters of India’s second-largest truck-maker Ashok Leyland, is in talks with Europe’s third-largest auto component manufacturer Valeo SA to buy a controlling stake in the company in a deal that is expected to be around $1.5 billion (Rs 6,000 crore).

Valeo has a market capitalisation of $3.03 billion according to the company’s last trading day data. At current valuation a controlling stake of 51 per cent would be over $1.5 billion.

The Hinduja Group has projected an investment of $50 billion (Rs 2 lakh crore) over the next 5 to 7 years in diversified growth opportunities. Ashok Leyland had also talked about entering the auto component business at a recent analyst meet.

Valeo reported operating revenues of $15.32 billion in 2007, a1.5 per cent growth over the previous year. The company’s net income for the year was a mere $127.9 million, a 1.7 per cent drop from the previous year.

Hedge fund Paradus European Special Opportunities Master Fund LP is Valeo’s largest shareholder with 18.54 per cent, according to data up to December 31, 2007, available on the company’s website. Morgan Stanley & Co International holds 11.11 per cent as the second-largest shareholder

Indian Overseas Bank to take over Pune bank

Indian Overseas Bank Ltd said on Monday its board has approved in principle the proposed takeover of Pune-based Shree Suvarna Sahakari Bank Ltd.

JM Financial unit to buy out ASK Sec's stake in JV

JM Financial Consultants Ltd., a unit of JM Financial Ltd said on Monday it has decided to buy out its joint venture partner in JM Financial ASK Securities Pvt Ltd.
JM held a 60 percent stake in the joint venture.

Sensex Futures to go live in US from April 4

The BSE Sensex Futures will start trading on the US Futures Exchange (USFE) from April 4.It will be the first Asian index futures to go live on the US exchange.The -dollar denominated futures contracts will trade 23 hours a day on the USFE, and will have a notional value of 40,000 index units and the minimum price change would be $5.

For those wishing to invest in Indian equity, the BSE Sensex Futures will be a second option — the other being the American Depository Receipts (ADRs).While the BSE Sensex comprises top-30 shares on market capitalisation, the ADRs are spread across market capitalisations.

Read more in The DNA Money article.

NYSE eyes more stake in MCX, NSE

The NYSE Euronext is betting big on India. Not only does it intend to raise its stake in the National Stock Exchange (NSE) and the Multi Commodity Exchange (MCX) once foreign ownership rules are eased, but it also has plans to partner the two Indian bourses in developing their business.In the years to come, India could be one of the markets where the NYSE Euronext lists its shares, along with China and Japan, which are alos on the radar.

NYSE, a subsidiary of the NYSE Euronext, owns a 5 per cent stake in NSE, while the parent had earlier this year signed an agreement with MCX to acquire a 5 per cent stake in the commodity exchange (Related Story). The MCX deal is expected to be closed by June this year.

Read more in The Business Standard article.

Kotak arm raises $440 mn for PE buys

Kotak Investment Advisors Ltd (KIAL) has raised $440 million in a fund to invest in private equity opportunities, taking its total corpus under management to $1.4 billion. Kotak will continue its focus on investing in small and medium enterprises, mostly unlisted, a top official said. The fund has been raised entirely from institutional investors and high networth individuals in India who are Kotak Mahindra’s clients.

Compared to three years ago when the emphasis of investment was on global themes, private equity strategy is increasingly shifting to domestic opportunities, C Jayaram, head of KIAL and executive director at Kotak Mahindra Bank said.Another $250million will be raised from overseas investors by September.

The private equity group has two other funds, a $160-million fund that invests across sectors and a $68-million fund focused only on biotech. With the closure of the third fund, KIAL now has approximately equal amounts in both groups. It intends to launch a third group focussed only on investments in the core infrastructure sector with a corpus of $1 billion.

Mallya wants to buy Heineken's 37.5% stake in UB

Liquor tycoon Vijay Mallya is open to buying back Heineken’s 37.5% stake in United Breweries (UB), in which he holds an equal stake, at the prevailing market price. But Heineken sources said the Dutch brewer has no plan to sell its stake.

Heineken will inherit stake in UB from Scottish & Newcastle (S&N) after the completion of a worldwide takeover of the British brewer.At the current price, UB’s market cap is pegged at Rs 3,800 crore, down almost 50% from January’s peak. Mr Mallya will have to show up with Rs 1,425 crore if he were to buy back at the prevailing rate.

Read more in The Economic Times Article.

S&P launches India 10 Index

Standard & Poor's, the world's leading index provider, has launched S&P India 10, an index designed to provide investors with tradable exposure to the Indian equity markets.

To be eligible for inclusion in the index, stocks must have a float-adjusted market capitalization above $ 500 million at each annual rebalancing and a six-month average daily trading value above $1 million. The index uses an evolutionary algorithm-driven optimisation to maximise index basket liquidity at each rebalancing which occurs annually in January.

The S&P India 10 index comprises ten of the largest and most liquid Indian companies which trade on developed market exchanges. Among the companies included in the index are IT and consulting firm Infosys Technologies, ICICI Bank and HDFC Bank, as well as copper producer Sterlite Industries.The Index (S&P India 10) is one of a number of indices planned to be launched by Standard & Poor's in 2008 to provide investable exposure to narrow but high interest market segments where accessibility and investability are a current challenge.

Religare may buy another London-based brokerage

Religare Enterprises, a Ranbaxy-promoted group company, is looking at buying yet another London-based broking firm, for around Rs 700 crore.Though the name of the firm could not be established, sources close to the developments said talks are in the initial stages.

Sources said the proposed acquisition is likely to increase the scope of Religare’s institutional broking business.This move comes close on the heels of Religare’s 100 per cent acquisition of London-based investment banking firm Hichens, Harrison & Co for about Rs 400 crore through its subsidiary Religare Capital Markets Ltd.The listed entity is being acquired through a mix of equity and debt.

Read more in The Business Standard article.

HSBC investment arm buys 4.99% in Yes Bank

HSBC Financial Services Middle East has picked up a 4.99 per cent stake in Yes Bank in the secondary market.The global investment arm of HSBC has been investing in the bank since January.Rabo Bank holds around 18 per cent in Yes Bank.

While HSBC refused comment on Tuesday, the strategic investment in Yes Bank has set the market abuzz with rumours. This is the second strategic investment made by the HSBC group in a bank after its investment in Axis Bank (earlier called UTI Bank). The group now holds a 4.96 per cent stake in Axis Bank.

In the recent past, Citigroup had picked up around 12 per cent in HDFC. Analyst saw Citi’s acquisition, and its indirect stake in HDFC Bank, as a strategic move to get ready to buy an Indian bank once the RBI eases the rules for foreign banks to enter India.

According to the RBI norms, foreign banks are allowed to buy up to 5 per cent stake in a bank. Annually, all foreign banks operating in India receive permission to open around 12 to 14 branches.

Read more in The Business Standard article.

Jet Air plans to dilute 10% stake

Jet Airways is planning to dilute 10 per cent stake of the company in favour of foreign institutional investors and private equity players, K G Vishwanath, general manager-finance, said.“The decision was taken about three weeks ago,” Vishwanath said, but declined to disclose the price at which the stake will be sold.The stake sale will be conducted prior to the rights issue of equity shares through which the company plans to raise about $400 million.

Vishwanath said the rights share issue will be launched when market conditions are more favourable. Valuation is being determined, he added. “The extent of stake dilution by the promoter will be dependent on the valuation,” he said.

Goyal currently holds close to 80 per cent stake in the company. In January, Jet Airways’ board authorised the management to raise up to $800 million through qualified institutional placement and other modes, including the $400 million rights share issue.

Tata Chem raises Rs 3,400 cr for US buy

Tata Chemicals plans to achieve financial closure in the next couple of days for acquiring US-based General Chemical Industrial Products.The company acquired General Chemical Industrial Products for $1 billion (about Rs 4,000 crore) early this year.

Tata Chemicals would raise $850 million (about Rs 3,400 crore) in debt to fund the acquisitions, but declined to give details.The acquisition of General Chemical will make Tata Chemicals the second largest maker of soda ash in the world.The company currently produces 875,000 tonnes of soda ash annually and plans to raise the output to 1.2 million tonnes by optimising use of its current capacities in Mithapur, Gujarat, and Kenya.

Ford sells Jaguar/Land Rover to Tata-source

U.S. automaker Ford has agreed to sell its luxury brands Jaguar and Land Rover to India's Tata Motors for more than $2 billion, according to a source familiar with the matter. Ford, which signed the deal on Tuesday, plans to publicly announce the transaction in New York at 0800 EST on WednesdayThe deal will also see Ford pay about 300 million pounds ($598 million) into Jaguar and Land Rovers' pension funds, according to unions. Ford declined to comment.

Tata, India's top vehicle maker, has been in talks with Ford since it was chosen as the frontrunner to buy Jaguar and Land Rover a few days into 2008. Tata is pursuing the deal to gain a substantial foothold outside India. But analysts have questioned how Tata will incorporate the luxury brands into its stable of sturdy trucks and functional passenger cars, including the Nano, the world's cheapest car which it unveiled in January.

While Land Rover has generated three years of record sales with its iconic SUVs, the fit of Jaguar is far less clear. Ford, which lost $2.7 billion in 2007 and $12.6 billion in 2006, is spinning off Jaguar and Land Rover to focus on turning around its loss-making operations in North America.

The sale will include a commitment by Tata to continue buying engines from Ford, according to unions. All Jaguar and Land Rover's petrol engines are built in a Ford plant in South Wales, supporting hundreds of jobs there.

Read more in The Economic Times article.

Related Stories:
Tata Motors may bid for Ford's Jaguar, Land Rover
SBI, others to raise $3 bn for Tata Motors

UTI AMC to set up PE fund for core sector

The country’s leading fund house, UTI Asset Management Company, is entering the private equity space. It has joined hands with HSH Nord Bank of Germany and Shinsei Bank of Japan to float $600 million private equity fund which will focus on infrastructure sector.

All the three partners have already made a commitment of $25 million each towards the fund. UTI has turned its focus on the infrastructure. In the last calender year, the financial institution launched a mega infrastructure mutual fund, targeting investments in listed companies. The total fund requirement of country’s infrastructure is pegged at $380 billion over the next five years. The PE fund comes at a time when UTI is planning an IPO.

In the last calender year, infrastructure and real estate sector had attracted close of $2 billion investments. Sources said this PE fund would focused on infrastructure companies and SPVs and rest of the funds would be raised over next two years.

Rahejas to enter hospitality sector with Indian Hotels

Delhi-based Raheja Developers will foray into hospitality sector with the Indian Hotels Company. The realty player will develop six hotels in four years.While four of these will be business hotels in Four-Five-Star category, two will be budget hotels

Rahejas will develop only one stand-alone hotel in Gurgaon while others will be part of their shopping complexes. The investment in the 300-room stand-alone business hotel will be to the tune of Rs 150 crore (excluding land price) with an additional cost of Rs 50 lakh for furnishing.

According to sources, the group has negotiated terms for a management contract with the Taj Group to develop two hotels — a 400-room business hotel in its mall in Gurgaon and another in Panipat.Raheja’s mall in Panipat, built at an investment of Rs 100 crore, will house Taj’s budget brand Ginger. However, Mr Raheja declined to comment on the development. Ginger does not have existing property in Delhi or NCR.

Read more in


The Economic Times article.

Oil India to go ahead with initial offering

Oil India (OIL), the country’s second largest government-owned exploration and production company, plans to go ahead with its initial share sale to the public despite the stock markets falling more than 29 per cent from its peak in January. However, the issue, earlier scheduled for February, is likely to be delayed by a few months.

There were speculations that OIL’s share sale may be put off “indefinitely” as the government is not keen that the company enter a weak market.Rubbishing speculations that the share sale has been put off indefinitely due to market volatility, OIL Chairman and Managing Director MR Pasrija said, “Our fundamentals are strong and the demand for petroleum will remain high,” adding that the high crude oil prices would mean the bottomline would remain strong.

OIL had planned to offer 10 per cent of its shares to the public in February to raise around Rs 2,000 crore.But this sale didn’t happen as the company is yet to meet the Clause 49 norms, which makes it mandatory for a listed company with an executive chairman to have half of its board made up of independent directors.

Pasrija did not give a timeframe for the public offer as the company is awaiting government clearance.

The government also plans to sell 10 per cent of its equity in OIL to Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation to raise another Rs 2,000 crore.

The company has appointed JM Morgan Stanley, Citigroup and HSBC Securities as the book running lead managers to the issue.

Read more in The Business Standard article.

Related Stories:
OIL allowed to sell 10% through IPO
OIL will issue bonus shares after IPO

ICICI Bank buys back $50 mln of bonds

ICICI Bank, India’s second biggest bank, said on Monday it had bought back and retired bonds with a face value of $50 million that were due to mature in 2012, its second such transaction in March.The bonds, which had a 5.75% coupon, were issued by the bank’s Bahrain branch.

On 8 March, it had said it has bought back and retired $50 million of bonds with a 6.625% coupon that were due to mature in 2012 and were also issued by its Bahrain branch.

SBH plans to raise Rs 900 crore

State Bank of Hyderabad (SBH) will raise Rs 900 crore to meet Basel-II compliance requirements for Accounting Standards 15 (AS15) as well as for the next year’s expansion plans.

Amitabha Guha, managing director, State Bank of Hyderabad, said Rs 500 crore had been mobilised so far via the upper tier-II mode since March 18 this year, while the remainder would be sourced through perpetual bonds.The fund-raising has become necessary due to a one-time provisioning of around Rs 450 crore by the bank to meet AS15 requirements.

On the AS15 front, the bank has two options — adoption in phases over a period of five years or implementation in one go.The bank would prefer to do it the latter way, Guha said.

After the mobilisation of the proposed capital, the capital adequacy ratio of the bank would be 10.50 per cent compared with 12.5 per cent as measured under Basel-I, he added.

Aurobindo acquires Italian generic company

The Hyderabad-based Aurobindo Pharma has acquired TAD Italy, a generic Italian company with 70 ready to market products. The acquisition will help Aurobindo enter into the Italian generic market, in a big way.The size of the deal was not disclosed.

During the integration process, Aurobindo expect to derive maximum synergies from the acquisition by shifting the manufacturing of TAD's products to its own facilities in Hyderabad, the company said in a press release.

Punjab National Bank to raise Rs 500cr

Punjab National Bank will be raising Rs 500 crore as PNB Upper Tier II Bonds Series IV, with option to retain oversubscription, through private placement.The proposed date for the issue is from March 25 to March 26, according to a release issued by the bank to the BSE.

Dena may raise Rs 350 cr in FY09

Dena Bank is likely to raise Rs 300-350 crore capital in the next financial year to maintain a 24 per cent credit growth.Dena Bank’s capital adequacy ratio (CAR) would be a little over 11 per cent at the end of March, including the tier-I capital adequacy ratio of 7 per cent, he said.

The bank is constrained from raising equity capital as the government stake in the bank is at the minimum threshold of around 51 per cent.The bank had posted an extraordinary 176 per cent year-on-year net profit growth in 2006-07 due to a low base.

Read more in The Business Standard article.

Mother Dairy, Dhara get set to merge

National Dairy Development Board (NDDB) has kickstarted the process of merging two of its wholly-owned subsidiary companies - Mother Dairy Fruit & Vegetable (MDFVL) and Dhara Vegetable Oil & Foods Company (DOFCO) - as part of an internal restructuring exercise. NDDB says the move is aimed at consolidating operations and synergising efficiencies of both the subsidiaries.

DOFCO was set up in 2000 for marketing the Dhara brand of edible oils and bulk trading of agri-commodities. However, for close to five years now, it’s MDFVL that has been selling, distributing and marketing Dhara.

Read more in
The Economic Times article.

SBI’s rights issue fully subscribed

A $4.1 billion rights issue by State Bank of India, India’s largest bank, was fully covered on Tuesday, despite the global financial turmoil that knocked its shares down by nearly a third during the offer period.

The state-run bank offered investors one share at Rs1,590 for every five held, looking to raise Rs16,736 crore to meet demand for loans in a growing economy. It was the bank’s first share sale in more than a decade.

The Bank of New York with a 7.42% stake through SBI’s global depository receipts and state-run Life Insurance Corp. of India with a 3.6% stake are the largest shareholders in the bank after the government.The government said last month it would invest Rs9,996 crore to maintain its 59.73% stake in the bank.

Citigroup, CLSA India, Deutsche Bank, DSP Merrill Lynch, Kotak Investment Bank and SBI Capital Markets are the lead managers to the issue.

Read more in The Livemint article.

HDFC to raise Rs 4,000 cr debt

Mortgage lender Housing Development Finance Corporation (HDFC) will be raising Rs 4,000 crore ($1 billion) debt to finance its stake purchase in HDFC Bank. The debt will be raised over a timeframe of 18 months.HDFC Bank recently announced the acquisition of Centurion Bank of Punjab in an all-stock deal. Following this, HDFC Bank announced a private placement of equity to HDFC to enable the mortgage lender to maintain its stake at the current level of 23.3 per cent. This entails an investment of almost $1 billion by HDFC, according to a sources.

The the possibility of an equity issue in the near future by HDFC has been ruled out and it would instead use the option of raising debt to finance its purchase.The merger paved the way for the creation of the country's largest private sector bank in terms of branch network. The combined entity will have a nationwide network of 1,148 branches. ICICI Bank has close to 955 branches.

SBI, others to raise $3 bn for Tata Motors

State Bank of India (SBI) led consortium will raise $3-billion loan by April for Tata Motors’ acquisitions abroad, including the $2-billion Jaguar and Land Rover deal.Apart from SBI, the consortium will include leading entities like Citibank, Standard Chartered, BNP Paribas, JP Morgan, Tokyo Mitsubishi UFJ and Mizuho Financial Group, a source said. The country’s largest lender is also in talks with two-three public sector banks to be a part of the consortium, the source said.

Though the exact amount financed by each member could not be ascertained, it is understood to be equally contributed by all banks, around $37.5 million, by each entity in the consortium.Financiers in the consortium will normally receive commissions in the range of 0.50-1% of the deal amount, but it may vary according to the period of funding and the amount to be raised.

Read more in

The Economic Times article.

Baring Private Equity acquires 12% in Sharekhan

Baring Private Equity has pipped financial services giant Merrill Lynch to acquire a 12% stake in Mumbai-based brokerage firm Sharekhan in a deal worth Rs 240 crore.This deal values the brokerage company at Rs 2,000 crore. The transaction is through a mix of secondary sale by the largest shareholder of the brokerage firm Citigroup Venture Capital (CVC) and additional infusion of funds into the company’s capital.

Last year, CVC along with IDFC had invested around Rs 650 crore to pick 85% stake in Sharekhan. This translates into valuation upside of more than 125% in ten months. CVC owns 75% in Sharekhan while IDFC holds 10% and the management and employees hold the remaining 15%.

Last year, CVC and IDFC together had acquired 37% equity owned by Sharekhan promoter Shripal Morakhia while 48% was acquired from other shareholders including GE, Intel Capital and some funds advised by HSBC PE India.CVC was believed to be keen on diluting its stake in Sharekhan due to some regulatory issues. CVC, part of banking major Citigroup, had a significant majority stake in the brokerage firm.A private equity firm holding substantial equity stake in an unlisted company would be classified as a promoter. If that company goes public, the PE firm’s shares would have a lock-in period and cannot exit for a certain period. This could be one reason why CVC intends to dilute its stake, though it could not be verified independently.

Read more in



The Economic Times article.

Cairn India to sell 5.37% stake for Rs 2,534cr

Cairn India, the Indian arm of British oil and gas company Cairn Energy, has decided to sell 5.37 per cent stake to Malaysian state oil and gas firm Petroliam Nasional, or Petronas, and Singapore-based Orient Global Tamarind Fund for Rs 2,534 crore ($625 million) to fund expansion plans.

The company will sell a total 113 million shares – 63.3 million shares to Petronas and 49.7 million shares to Tamarind, New Zealand billionaire Richard Chandler’s investment group – at Rs 224.30 each.The share sale price is 1.8 per cent lower than Cairn India’s closing price on March 14 and a 40 per cent premium to its listing price of Rs 160.

Following the share sale, Petronas’ stake in Cairn India will rise to 12.7 per cent, while Orient Global Tamarind will own 2.6 per cent. Cairn India’s holding will be reduced to 64 per cent.The share sale proposal was approved by Cairn India’s board of directors today and will be taken up for shareholders’ approval on April 16.The shares will be locked-in for one year from the date of allotment.

Read more in
The Business Standard article.

Osian`s sells 9.4% stake to PE firm

Osian’s Connoisseurs of Art has signed an agreement to sell an approximately 9.4 per cent stake to Abraaj Capital, Dubai-based private equity firm, for Rs 80 crore. Osian’s valuation, going by this transaction, is Rs 840 crore. Arif Masood Naqvi, vice chairman and group chief executive officer of Abraaj, will join the Osian’s board.

Starting with its first auction in 2000, Osian’s, founded by Neville Tuli, has grown into a unique private-sector art institution straddling various sectors of art, films and lately, sports. There is Osian’s archive of visual and textual material which includes rare etchings, lithographs, maps of India, British Indian photography, popular art, cinema publicity material.

In 2004, Osian’s acquired film journal Cinemaya, and took over the organising of Cinefan, the film festival.Having acquired Minerva theatre in Mumbai in 2006, where it is building Osianama, a museum for cinema and the arts, the company has also ventured into film production.

Read more in The Business Standard article.

Tata Steel may raise Rs 4,000 cr via non-fungible GDRs

Tata Steel is considering raising around Rs 4,000 crore through an issue of non-fungible GDRs to part-finance its acquisition of the Anglo-Dutch steelmaker Corus.
According to merchant banking sources, the company has started discussions with institutional investors on the prospect of launching the instrument. The company, they said, will take a call after receiving feedbacks from likely buyers.

The equity portion of the issue raised around Rs 3,700 crore while the preference offer mopped up Rs 6,000 crore. The preference shares will be converted into equity on September 1, 2009. The company’s equity capital has been enhanced by 20% due to the equity portion of the rights issue and it would go up by 35%, post conversion of preference shares.

Read more in

The Economic Times article.

Chinese firm pips REL, GMR to buy Tuas Power for $3 bn

China’s largest power generator China Huaneng has outbid India’s Reliance Energy (REL) and GMR Group by placing the highest bid of $3.1 billion for a power firm put on block by Singapore’s investment arm Temasek Holdings.REL and GMR Group were the two Indian bidders for Tuas Power, one of the three power generating companies being privatised by the Singapore government.

Besides, REL and GMR, three international firms, including China Light and Power and HongKong Electric, were also believed to have been in the race to acquire Tuas Power.

Temasek Holdings has signed a share purchase agreement with SinoSing Power Pte Ltd, a wholly-owned subsidiary of China Huaneng, for the 100 per cent sale of Temasek’s wholly-owned Tuas Power Ltd for a cash consideration of 4.235 billion Singapore dollars, an official statement said.

Read more in The Business Standard article.

MTNL likely to offload 50% stake in Suntel

MTNL, which has been shortlisted as the preferred bidder to acquire Sri Lankan telco Suntel, is already in talks with partners to offload a 50% stake in the company (Suntel).If Suntel were to be a 100% subsidiary, it will be subject to the policies and practices of MTNL. But, Suntel is a profit-making company and MTNL wants it to retain its existing structure with regard to all its policies — MTNL is of the view that this can be achieved if it limits its stake in the Sri Lankan telco to 50%.

As the target company is being run by highly-skilled professionals, to maintain its existing structure with regards to HR and other policies, MTNL has in principle decided to limit its stake to 50% and is in talks to find suitable partners.

MTNL, which offers telecom, internet and IPTV services in the metros of Delhi and Mumbai, had been witnessing a fall in its revenues and profits over the last couple of quarters due to market saturation in these two cities. The PSU, which is a JV partner in Nepal’s United Telecom and also offers telecom services in Mauritius through its 100% subsidiary, has been scouting global markets for new licences.

Sri Lanka is set to be the company’s third market outside India.Over the last couple of years, MTNL has lost its bid to acquire Telekom Kenya in addition to failing to win mobile licences in Saudi Arabia, Qatar, Bhutan and several other countries .

Read more in

The Economic Times article.

Tommy Hilfiger eyes 51% stake in Indian biz

Global premium lifestyle brand Tommy Hilfiger, controlled by buyout private equity Apax Partners, is looking at direct ownership of its India operations by bringing in the maximum permissible 51% foreign direct investment (FDI) allowed in single brand retail.

According to sources the Amsterdam-based Tommy Hilfiger Europe BV, which has effectively become the global headquarters for the original American designer brand following the Apax takeover, was considering buyout of the perpetual India rights, currently with the Murjani Group.

Read more in


The Economic Times article.

Merrill pumps in Rs 300 crore into logistics JV

Merrill Lynch, one of the world’s leading wealth management, capital markets and advisory companies has invested close to Rs 300 crore to set up a joint venture company with the DRS Group, a Third Party Logistics (3PL) company based out of New Delhi. The new entity, DRS Warehousing Corporation, will build and operate eight warehouses located in various parts of the country.

The DRS Group is expected to get a 30% stake in the JV, while Merrill Lynch will hold the remaining stake. According to sources, each warehouse will be more than 2,00,000 sq feet and four warehouses will see a completion target before December, 2008.

This is a significant development, considering investors and 3PL companies are investing heavily in warehousing. By 2008, 3PL service providers, with the likes of TNT, Transport Corporation of India, Blue Dart, Gati and Safexpress, are looking at creating more than 25 million sq ft of warehousing space in India.

Read more in
The Economic Times article.

Goldman Sachs picks up 20% in Shriram Credit for Rs 300 cr

One of the world’s largest investment banking firms, Goldman Sachs, is picking up a 20% stake in Chennai-based Shriram Credit for Rs 300 crore, making an indirect entry into equity and commodity brokerage business in India. Shriram Credit is a non-banking finance company (NBFC) under the south India-based Shriram Group, which is engaged in lending activities.

The Indian group is transferring its brokerage and distribution services business to Shriram Credit and bringing in Goldman Sachs as a significant minority partner. The deal values the firm at Rs 1,500 crore ($375 million). Goldman Sachs is routing the deal through its 100% Mauritius-based subsidiary GS Strategic Investments.

According to company sources as per the initial agreement, the US-based I-banking firm also reserves the right to further expand its equity stake by 5% to take its stake in Shriram Credit to 25%. The transaction will be through a preferential allotment to Goldman Sachs.

Read more in


The Economic Times article.

Yes Bank to raise funds through institutional placement

Private sector lender Yes Bank will raise funds by way of issue of shares to institutional investors.

The shareholders at the extra ordinary meeting approved the allotment of up to two crore shares to Qualified Institutional Buyers, the bank said in a filing to the Bombay Stock Exchange.

Nicholas Piramal may offer research arm stake to PEs

Mumbai-based drug major Nicholas Piramal India (NPIL) is in talks with private equity funds for the sale of a ‘small’ stake in its research company, to be soon renamed Piramal Life Sciences. Piramal Life Sciences will be listed in India in the first or second week of June.

The company is seeking funds for its recently spun-off research company to mitigate the risks and costs involve in new drug development. The move may also allow the company to license out its new molecules at a later stage of development and, therefore, extract more value from its research.

Three independent reports published by Lehman Brothers, Enam and Kotak Securities have valued the pipeline of drugs under development at the research entity between $480 million and $540 million.

Read more in
The Economic Times article.

Tata Communications to raise $1bn

Tata Communications, the country’s largest, long-distance telephony company, plans to raise $1 billion (Rs 4,000 crore) to partly fund its expansion plans for the next three years. It has already approached banks to raise $350 million within a month.

In February, the company, formerly known as Videsh Sanchar Nigam (VSNL), said that it would spend $2 billion in the next three years to complete additional submarine cable systems connecting emerging markets across the world and for its WiMax services.

Bank of America is one of the banks working out the mandate for raising $350 million for the first year of the three-year expansion plan.The company has options such as foreign currency convertible bonds, qualified institutional placement or dilution of stake in one of its subsidiaries.

Read more in The Business Standard article.

Marico sells unit to Denmark’s Good Food

Consumer goods firm Marico Ltd said late on Tuesday it has sold its processed foods business under the ‘Sil´ brand to Denmark’s Good Food Group for an undisclosed sum to focus on its cosmetic business.
The sale to Good Food’s Indian unit, Scandic Food India Pvt Ltd, includes a manufacturing unit near Pune.Marico will distribute the Sil range of products for one year, according to an official statement issued by the company.Marico owns India’s top coconut hair oil brand Parachute and has acquired hair care brands in South Africa and Egypt.

Future Group to buy majority stake in two Centrum firms

The Kishore Biyani-controlled Future Group has inked a strategic alliance with financial services conglomerate, Centrum, under which it will acquire controlling stakes in Centrum’s foreign exchange and retail broking businesses. It will also take a small stake in Centrum’s investment banking enterprise.

A press release issued by Centrum Group says the three specific areas that the two signatories to the strategic deal are partnering for are:
• Indivision fund, a private equity fund managed by future group will acquire 10% stake through a preferential allotment in Centrum Capital Ltd, the group’s flagship investment banking company at an enterprise value of Rs1,200 crore.
• Future Capital Holdings Ltd will acquire 50.1% stake in CentrumDirect Ltd, the forex money changing subsidiary of Centrum Capital Ltd through fresh capital infusion of Rs75 crore.
• Future Capital Holdings Ltd will also acquire 50.1% in a new joint venture company Centrum Wealth Managers Ltd, for Rs25 crore. Centrum’s existing Retail Broking, PMS and Financial Products Distribution businesses will move into Centrum Wealth Managers Ltd.

Read more in The Livemint article.

Mastek acquires STG for $29 mn

The Mumbai-based IT solutions and services company Mastek has acquired the US-based Systems Task Group (STG) International, an IP-based enterprise solutions provider to the North American property and casualty (P&C) insurance industry.Mastek bought the company through its wholly owned US subsidiary, MajescoMastek, in an all-cash deal worth $29 million (around Rs 116 crore).

This acquisition is the second such initiative by Mastek in the current financial year. Under terms of the agreement, MajescoMastek will hold 100 per cent stake in STG. While 85 per cent of the total consideration is payable at the time of acquisition, the remaining will be linked to ongoing performance and paid by way of earn-outs.The acquisition is being funded through internal accruals and bank borrowings.

The buy will strengthen Mastek’s presence in the non-life insurance segment and expand the opportunity pipeline in the overall insurance vertical. STG, headquartered in New York, has a fully integrated offshore competency centre in Mumbai (India).

Read more in
The Business Standard article.

Tata Motors to raise $1 bn long-term funds

Tata Motors Ltd, top bus and truck maker, said on Tuesday it planned to raise additional long-term funds of up to 40 billion rupees ($1 billion).Tata Motors is in negotiations to buy Ford Motor Co's luxury UK brands Jaguar and Land Rover.

Govt considering proposal to merge SBI, SBS

Government is considering a proposal for merger of State Bank of India and State Bank of Saurashtra as the boards and unions of the two have approved the move.This was stated by Minister of State for Finance Pawan Kumar Bansal in Rajya Sabha today.The boards of directors of SBI and State Bank of Saurashtra have approved merger to "allow economies of scale in terms of network, manpower and other resources besides entailing better management of risks," he said.

He said the Government would not put pressure on banks to merge although the Narasimham committee on banking sector had recommended consolidation in the banking sector so that Indian banks are equipped to compete at the global level.

Read more in


The Economic Times article.

Gitanjali Gems acquires Trinity Watch, Renaissance Retail

Jewellery maker Gitanjali Gems on Monday said it has forayed into the business of providing gold loans and safe deposits vaults, besides acquiring Trinity Watch Co and Renaissance Retail Ventures for an undisclosed amount.

The company has also, by way of incorporation of its wholly-owned subsidiary Mohar Jewels, forayed into the business of providing gold loans and safe deposits vaults to entities and individuals, Gitanjali informed the Bombay Stock Exchange.
The company, through its wholly-owned subsidiary Gitanjali Lifestyle Ltd, has acquired the two businesses to expand its product portfolio.The company has also bought Trinity Watch Co, engaged in the business of sale of watches under its registered premium brand ‘Iris´. Trinity also distributes various international watch brands under license from various principals.

Read more in
The Live Mint article.

India Inc opposes 25% public holding norm

Corporate India is not in favour of a uniform 25 per cent minimum public shareholding for all listed companies as proposed by a recent finance ministry discussion paper.Some large companies said the measure would broaden and deepen the equity cult in the country, but feel that a blanket 25 per cent minimum public shareholding norm should not be applied indiscriminately to all companies.

The ministry had floated the paper on February 1 and asked for public comments by the month-end. The minimum public shareholding limit now is 10 per cent.Finance ministry officials have received around 40 responses.

The finance ministry and The Institute of Company Secretaries of India (ICSI) will hold discussions with company representatives on March 29 to evolve a consensus on the proposal.

Read more in
The Business Standard article.

Turtle looking to offload 20% stake

Shirt manufacturer Turtle is on the lookout for a strategic investor to offload 20% equity. The company will use the proceeds to part-fund its expansion plans.The idea is to not only garner funds but also look at an investor who would also buy in bulk from the company.The company is reportedly in talks with a large home-grown retail chain or a US-based investor.

The company will require about Rs 14 crore in 2008-09, of which about Rs 6 crore will fund its retail expansion plans while the rest will feed its working capital requirements.Apart from a stake sale, the company is looking at a debt component for raising this quantum.Turtle is now also eying Fiji Islands and Saudi Arabia. The brand already has a presence in Dubai.

Turtle has one plant in Bangalore and three in Kolkata with a combined manufacturing capacity of 1.8 million pieces per annum. Shirts form 70% of Turtle’s product portfolio. The rest comprise trousers, T-shirts and accessories.

Turtle forward integrated into retail in 2004 and is now present in 380 cities. However, now it is aiming at a deeper retail penetration to capture a larger slice of the Indian consumer’s mindspace.As part of this blueprint, it is setting up marketing teams for each state to support its distribution channels. It has also tied up with lifestyle stores like Indiabulls Mega Stores, Globus, Shopers’ Stop and Pantaloons for greater visibility.

Read more in
The DNA Money article

Private equity firms eye IPL franchises

With recent stock market crash, private equity players are scouting for IPL teams as an alternative investment. The focus of their investment is the franchisee owners.The franchisee owners are locked in talks with these players to offload a part of their stakes in their respective teams.

Investment banking sources say, many team owners are in the market to raise funds. "We are given to understand that minority stakes will be diluted by the owners. Names of franchisees going around include Deccan Chronicle (Hyderabad), Vijay Mallya (Bangalore), Ness Wadia and Preity Zinta (Mohali) and Shah Rukh Khan's Red Chillies Entertainment (Kolkata)," an investment banker, who did not wish to be named, said.

Chennai Super Kings, the team owned by India Cements (ICL), has been approached by private equity investors. Admitted N Srinivasan, vice chairman and MD, India Cements: "A few private equity investors met me. They were interested in knowing if I would be willing to dilute my stake in the team's equity. I have told them that we are not in favour of diluting to anybody for the moment."

Read more in The Times of India article

KEC to acquire US power firm

The RPG group-promoted KEC International, one of the largest power sector Equipment, procurement and construction (EPC) majors in the world, will soon acquire a mid-sized power sector EPC player in the US.

Sources said the acquisition was aimed at strengthening its presence in the US market. The targeted company will have $100 million turnover.The Rs 2,538-crore KEC already has a 50:50 joint venture in the US – KEC Power – with Power Engineers, a major power sector consulting company in the US. The JV was formed in 2006 to bid for projects in the US market.

The US market contributes 2 per cent of the turnover for KEC. Of the current order book of over Rs 5,000 crore for KEC, overseas projects contribute nearly 68 per cent.

KEC was also targeting the South African market. South Africa, now reeling under severe power shortage, has drawn up plans to bring power from the neighbouring countries.Investments, the investment division of KEC, would be listed on the stock exchanges within a few weeks.

PE firms eye stake in Adhunik Metaliks arm

Kolkata-based Adhunik Metaliks is in talks with private equity players for acquiring stake in its wholly owned subsidiary, Orissa Manganese & Minerals.The deal is likely to be struck in the next one month and Adhunik is looking at diluting 10-11% in the company.

Orissa Manganese & Minerals has six manganese mines and one iron ore mine. The iron ore mine has reserves of around 80 million tons having iron content of more than 65%.
Manoj Agarwal, managing director, Adhunik Metaliks said, the iron ore mine would start production from June-July 2008.

FMR, FIL up stake in Rolta India

Engineering and geospatial services firm Rolta India Ltd said on Friday FMR LLC and FIL Ltd, along with their subsidiaries, have acquired a further 0.13 percent stake in the company to raise their total holdings in the company to 5.04 percent.

Blackstone to up Nagarjuna Construction stake to 12.2%

US-based private equity firm Blackstone is all set to raise its stake in Nagarjuna Construction from existing 9% to 12.2%. The company has got the Foreign Investment Promotion Board (FIPB) clearance for investing in the Hyderabad-based infrastructure firm.Blackstone had bought 9% stake in Nagarjuna Construction in July 2007. The Hyderabad-based company raised $180 million (Rs 730 crore) through the sale of fresh shares to financial institutions.

In March 2007, the company had informed BSE that it would be doing a placement to institutional shareholders at a premium of Rs 215 per share of Rs 2 paid-up value. The company had simultaneously taken the approval of shareholders for an issue of 25 lakh warrants to an investment company, AVSR Holdings, belonging to the promoters, also at the same price of Rs 217.

At the end of March 2007, the foreign fund holding in the company stood at 30.2%. The promoters hold 24.5% stake in the company. Nagarjuna Construction announced that it has secured three new orders aggregating Rs 424 crore. All these projects which include a Rs 266-crore order to construct a sewage system in Indore, are likely to be completed in the next 36 months.

Read more in The Economic Times article.

Thomas Cook plc is repurchasing Thomas Cook India

UK.-based travel operator, Thomas Cook plc is repurchasing Thomas Cook India ltd (TCIL), which it sold to Dubai Financial two years ago. The Dubai group owns 62% in TCIL and the buyback is being done at Rs 107 per share, said a highly placed sources in the company. The deal is expected to be announced globally later today.

The buyback of the Indian travel major, is a reaffirmation of the growing strength of the Indian market. The TCIL share rose almost 5% to Rs 88.50 on the BSE within five minutes of the market opening.

TCIL has a strong presence in the forex, inbound, outbound and business travel segments. Since the entry of the Dubai group, the company has been growing aggresively through a series of acquisitions, mainly in the travel and foreign exchange space. It bought out LKP Forex to consolidate its lead in the foreign exchange business.

This was followed by the acquisition of Travel Corporation of India (TCI), an established player in the inbound tourism business. In the first nine months last year, TCIL earned consolidated revenue of Rs 225.8 crore (Rs 121.3 crore) and profit after tax of Rs 30.5 crore (Rs 17.3 crore).

10 i-banks compete to manage GSPC’s September public issue

Ten merchant banks have put their hands up to manage Gujarat State Petroleum Corp. Ltd’s (GSPC) fresh proposal for an initial public offering (IPO) in September, with the company now fetching a 50% premium over its valuation in late 2006 when it made its first approach for an issue.

GSPC, which postponed its earlier plans for an IPO, has not yet handed out the mandates, but bankers involved in the said GSPC could raise $1.5 billion (Rs6,045 crore) from its IPO. The quantum of shares on offer will be decided after mandating the bankers.

Citigroup Global Markets India Pvt. Ltd, UBS Securities India Pvt. Ltd, Deutsche Securities (India) Pvt. Ltd, JPMorgan India Pvt. Ltd and DSP Merrill Lynch Ltd are the five foreign investment banks that attended the second round of IPO talks in February.The domestic line-up had SBI Capital Markets Ltd, ICICI Securities Ltd, Enam Securities Pvt. Ltd, Kotak Mahindra Capital Co. Ltd and JM Financial Consultants Pvt. Ltd.

Read more in

The Live Mint article.

Mallya may dilute 15% stake in merged airline

Liquor baron Vijay Mallya could end up diluting 15-20 per cent of his 76 per cent holding in the merged airline as a result of Deccan Aviation’s proposal to raise Rs 1,600 crore and expand authorised capital by Rs 350 crore, said airline experts.

Mallya is trying to raise Rs 1,600 crore for its airlines business through Deccan Aviation, the listed company into which he plans to merge Kingfisher Airlines. Deccan has called for an EGM on March 18. Deccan also plans to expand its authorised capital from Rs 150 crore to Rs 500 crore by adding 25 crore shares of Rs 10 each and one crore preference shares of Rs 100 each.

Read more in
The Economic Times article.

Unitech holds $1.5bn QIP issue

Real estate major Unitech Ltd has put on hold a $1.5 billion qualified institutional placement (QIP) issue planned for the first quarter of 2008 in the light of the instability in the domestic stock markets and the global liquidity crunch.The company could place a maximum of 200 million shares in the QIP and dilute up to 12 per cent of shares on a total paid-up share capital of 1,623.37 million shares.

Unitech’s decision follows the cancellation of initial public offers (IPOs) by Emaar MGF, another major property developer, and Wockhardt Hospitals, due to weak response from investors.

Unitech was expected to use the QIP proceeds for its upcoming projects and telecom foray, which it is planning in all 22 telecom circles of the country, for which it has received a licence from the government. According to its annual report for 2006-07, it has 50 million square feet of projects under construction.

The company is also foraying into the Mumbai real estate market with an investment of Rs 4,000 crore and is planning to build 50 malls across the country with an investment of Rs 20,000 crore.

Unitech has collected over Rs 3,100 crore on the Alternative Investment Market (AIM) of the London Stock Exchange through its arm Unitech Corporate Parks Plc (UCP).It has also received approval from the Singapore Stock Exchange for an IPO for Unitech Office Trust, which will acquire its IT/ITeS firms in Noida, Gurgaon and Kolkata. It is expected to raise $700 million (Rs 2,800 crore) through this IPO.

BoB, Andhra Bank, UK firm in life JV

Bank of Baroda, Andhra Bank and Legal and General Group of UK have signed the shareholder’s agreement for a joint venture to launch life insurance operations. The MoU for the joint venture was signed on 16th November 2007.

BoB, Andhra Bank and Legal and General will hold 44 per cent, 30 per cent and 26 per cent respectively in the life insurance venture named Baroda Legal & General Life Insurance Co. The company is likely to launch operations between January and March 2009, subject to regulatory approvals, at an initial capital of Rs 200 crore.

the new entity will be a pure bancassurance driven company and will not hire agents. The two banks have 4000 branches and 45 million customers.BoB has a bancassurance tie-up with HDFC Standard Life Insurance, while Andhra Bank has tied up with LIC. Both these will end once the proposed company begins operations in 2009.Legal and General has funds under management amounting to $550 billion. It is a leading UK risk, wealth and investment company with a market capitalisation of $15 billion.

Read more in
The Business Standard article.

Related story
BoB, Andhra Bank in insurance venture talk

Bahrain firm buys 49% stake in IT park

A Bahraini real estate firm has acquired 49% stake in an information technology park in Noida for $69 million.Acacia Real Estate, a company promoted by Bahrain-based TAIB Bank, has acquired 49% of Logix TechnoPark located in Noida.

With a projected internal rate of return of over 24% per annum, the deal is structured to provide investors with downside protection and an average coupon of 8% per annum over a three-year holding period, he added.

The property, along the Greater Noida Expressway, consists of four newly built 100% occupied office towers with a total gross leasable area of 461,120 sq-ft.It is currently leased to Oracle, Mentor Graphics, Conexant Systems and SafeNet InfoTech.

Deutsche may buy 5% in DSE

German multinational bank, Deutsche Bank, is likely to buy a 5% stake in the Delhi Stock Exchange (DSE). If the deal happens, this would be the fourth major foreign investment in DSE after US-based Lamb Company, New Vernon Private Equity and Passport Global Master Fund SPC (British Virgin Islands) picked up stakes in the stock exchange.

The DSE got de-mutualised in August 2007 and has around 2,800 companies listed on the exchange with 1,800 companies trading exclusively on it.Earlier, the Foreign Investment Promotion Board (FIPB) had approved four foreign investors — Wilmette Holdings, Mauritius, Noor Financial Investment Company, Kuwait, Ikarus Industrial Petroleum Company, Kuwait and Kuwait Privatisation Projects Holding Company, Kuwait to pick 5% stake in the DSE, but the deal didn’t work out. DSE executive director Harjit Singh Sidhu declined to comment on the developments.

After the government announced that it will allow up to 49% foreign stake (including both FII and FDI) in Indian exchanges, a list of foreign companies have bought stake in Indian stock exchanges. The latest expression of interest came from Nasdaq, the largest electronic equity securities trading market in the US, to partner with Ahmedabad Stock Exchange (ASE).

Earlier this year, NYSE Euronext bought 5% stake in the Multi Commodity Exchange (MCX) for $55 million. The government has, however, capped foreign ownership for a single investor in commodities exchanges at 5%.

At DSE, foreign stake holders hold 15% stake and 36% stake is with private investors such as Parsvnath, Omaxe, BCCL and NDTV. Analyst believe that investment from foreign partners will add value and help regional exchanges acquire advanced technology.

Infosys eyes Europe, Japan for acquisitions

Infosys Technologies is scanning the markets of Europe and Japan for acquisitions in the price band of $200-$300 million to energise its non-linear business strategy as well as to expand its geographic reach.

“We are looking at acquiring companies in Germany, France and Japan. These markets have started opening up and we are targeting companies engaged in consulting, BPO, packaged implementation services or IP-based firms as it will help us move up the value-chain considerably,” said Infosys CFO V Balakrishnan.

Unlike the traditional linear business model, where the revenue is effort-based (more the number of people working, more the revenue), the non-linear business model is based on outcome.So, with high-value services, the companies can demand a premium from its clients.

Last year, Infosys had taken over Philips’ finance and administration business process outsourcing (BPO) centres spread across India, Poland and Thailand for $28 million.In 2003, it had acquired Expert Information Services in Australia for $22.9 million.

Read more in The Economic Times article.