Baring Private Equity Asia raises $1.52 billion

Barings Private Equity Asia, which has over $2.5 billion in assets under advisory, has raised $1.52 billion, thus becoming the largest regional growth equity fund in Asia.

At a time when the highly leveraged US and European buyouts are showing signs of stress, private equity funds focused on growth investing in Asia, a strategy which largely does not use financial leverage, are continuing to attract interest from around the world.The fourth fund from Baring Asia had an original target of $1 billion, but raised its fund raising limit to account for the high investor demand. It had to still turn away a substantial amount of investors.

The fund is targetting companies in the alternative energy, media, financial services, consumer and industrial sectors, with operations in China, India, Japan, Singapore, Hong Kong and Taiwan. It plans to invest around $500-750 million in India.

The fund's prominent investments in the country cover brokerage houses Sharekhan ($65 million) and Karvy Stock Broking ($44 million), IT company Mphasis BFL (partially exited), Bhushan Power & Steel Company, and edible oil player KS Oils.

Baring has been investing in the Asian region since 1998. It has an active portfolio of 28 companies and its combined revenues stood at $4.5 billion for 2007.

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.

ICICI Venture, Baring PE set to buy 32% in Karvy for Rs 500 cr

Leading private equity investors ICICI Venture and Baring Private Equity Asia are set to invest around Rs 500 crore to pick up around 32% stake in Karvy Stock Broking Limited (KRBL), an arm of the Hyderabad-based Karvy Group.

The deal puts the enterprise value of the securities firm at around Rs 1,500-1,600 crore. MAPE Advisory Group advised Karvy on the transaction. The valuation, however, is lower than that of other established stock broking and investment banking players like Edelweiss Capital, Indiabulls, Motilal Oswal Securities and India Infoline which took PE route in the past and raised funds from the primary market.

ICICI Venture and Baring Private Equity are buying the 20% equity held by existing investor Pacific Century Group (PCG), while an additional 12% stake will be offered to them in the form of fresh equity, according to sources. The Hong Kong-based PCG had acquired the stake for Rs 83 crore in 2005, which had valued Karvy at around Rs 415 crore then.

Read more in The Economic Times article.

Related Post:
ICICI Ven buys Karvy stake:Sources

Baring Private Equity Asia Invests $22 Million In KS Oils For 8.86% Stake

Baring Private Equity Partners Asia has picked up 8.86 per cent stake in leading edible oil manufacturer KS Oils Ltd for Rs 90 crore ($22 milion). Baring Private Equity Asia III Mauritius has picked up 21.48 million shares at Rs 41.90 apiece (of face value Re 1).

A board meeting of the publicly listed KS Oils on August 22 has cleared the deal, the company informed the stock exchanges. The company has also made a preferential allotment of 23,866,350 warrants (to be priced at Rs 41.9 at conversion) to promoters of the company. KS Oils is promoted by the Garg family of Morena, Madhya Pradesh.
KS Oils had last year raised Rs 90 crore from private equity fund, Citigroup Venture Capital International, which owns about 14.82 per cent stake in the company. CVCI is also believed to be investing again in KS Oils a similar amount.

Early this month, KS Oils had said it would raise $60 million from overseas investors. It plans to raise $25 million through a preferential issue of global depository receipts (GDRs) in one or more tranches to foreign funds such as CVCIGP II Client Rosehill Ltd and CVCIGP II Employee Rosehill Ltd. It also plans to issue Foreign Currency Convertible Bonds (FCCBs) or GDRs of up to $35 million in one or more tranches. The $22 million fund raising from Baring is part of this fund raising.
PricewaterhouseCoopers (PwC) is acting as sole financial adviser to KS Oils in all its fund raising efforts through private placement of equity, GDRs and FCCBs.

Baring's Open Offer Will Make It Majority Shareholder In JRG Sec

Baring Private Equity India will come up with an open offer for a 20 per cent additional stake from JRG Securities shareholders. Baring had recently acquired a 45 per cent stake in the Kochi-headquartered stock broking firm for $35 million. The open offer is mandatory if one acquires more than 15 per cent stake in a listed company.

If the open offer is successful, Baring will be the largest shareholder in the broking firm with 65 per cent stake. It may also be possible that the open offer is not subscribed fully. In any case, Baring is most likely to be the majority owner of a stock broking firm.

Earlier Citigroup Venture Capital International had reportedly acquired an 85 per cent stake in retail broking firm Sharekhan for Rs 470-480 crore (the company is yet to announce the deal officially).

Citi, 3 others lead race for Sharekhan stake

Citigroup’s private equity arm Citigroup Venture Capital International, Baring Private Equity, TPG and 3i are the front-runners to acquire an equity stake in Sharekhan, the retail brokerage arm of the Mumbai-based SSKI group.

Some foreign and domestic banks have also expressed their interest in the brokerage firm, while existing private equity investors General Atlantic, Intel Capital and a group of funds advised by HSBC Pvt Equity India, which own about 48 per cent shares in Sharekhan, will look to sell either fully or partially in the current equity sale.

Intel, which owns 5 per cent, and HSBC-advised funds, which own close to 12.5 per cent, have been investors in Sharekhan for long. The other major shareholders are the Morakhias’ (promoters) with 37 per cent stake, while 300 employees together hold another 15 per cent.However, none of the employees would sell their stakes in the current round.

Sharekhan is valued at around Rs.800-850 crore. It is among the top five retail brokerage outfits in the country with over 100 branches across 150 cities.

Read more in The Business Standard article.