IDFC arm to raise $700m

Indian infrastructure specialist IDFC Private Equity is raising a new $700 million fund to buy stakes in firms expected to thrive as the country modernises its rag-tag power and transport networks.

IDFC's MD for investment, Satish Mandhana, said fund would close in the next two to three weeks, with 85% of money from abroad. Foreign investors are increasingly drawn to Indian infrastructure, as government estimates about $500 billion will be needed to build new roads, ports, airports and power plants by 2012 to keep pace with a fast growing economy.

Around 30% of that spending is expected to come from private sector, with rest split between federal and state governments.

IDFC in race for IFCI`s 26% stake

Infrastructure Development Finance Company (IDFC), an investor in public works, is interested in IFCI, competing with the Blackstone Group and General Electric Capital Corporation for a stake in the state-run project financier.

The winner of the 26 per cent IFCI stake will gain access to a market where lending grew 28 per cent last year, and where the central bank limits foreign banks’ ownership of local private rivals to 5 per cent. IFCI, bailed out by the government in 2003 because of bad debts, in July announced plans to sell stake to a local or overseas investor to bolster its capital

Other bidders including a group led by billionaire Wilbur Ross and comprising the Goldman Sachs Group, Standard Chartered and HDFC, were vying with Cargill Financial Services Corporation, Natixis and Newbridge Asia for the stake, IFCI said last month.

Read more in The Business Standard article.

L&T plans to pick up stake in Feedback

Larsen & Toubro (L&T), the country’s largest infrastructure company, is close to acquiring a stake in Feedback Ventures, a leading integrated infrastructure services firm. L&T’s investment vehicle for the acquisition will be the newly formed L&T Infrastructure Finance.

Sources in the know of the development said L&T Infrastructure’s investment in Feedback would be strategic in nature and bring both the companies closer in the future.Mission Holdings, a group of people who founded the New Delhi-based Feedback Ventures, holds 36 per cent stake. Other shareholders of the closely held company include DLF, HDFC, IDFC and the Thapar group outfit, NewQuest Corporation.

Read more in The Business Standard article.

UB raises debt for Deccan buy

UB Group has raised Rs 550 crore as debt financing from IDFC, HDFC and IL&FS for its stake buy in Air Deccan.These institutions could pour in more debt as the group company UB Holdings is set to make an open offer for additional 20% stake in Deccan Aviation, the parent of the low-cost airline, shortly.

On May 31, UB Holdings bought 26% stake in Deccan Aviation for Rs 550 crore, and announced plans for a mandatory open offer. At the time of the acquisition, UB indicated that it could rope in financial investors for de-leveraging the acquisition partially, as it had received several expressions of interest from PE funds. But with debt financing clinched, UB is not likely to divest stake for de-leveraging.

UB has tied up debt financing from IDFC and HDFC for over Rs 400 crore. “The debt financing has been arranged for funding most of the 26% purchase,” a top UB official said, without divulging the name of the institutions. IL&FS is believed to have pumped in the remaining Rs 150 crore.

Read more in The Economic Times article

IDFC takes QIP route to raise Rs 2,100 crore

Infrastructure Development Finance Company (IDFC) said that it has successfully placed its qualified institutional placement (QIP) offering of Rs 2,100 crore through issue of 16.53-crore shares at Rs 127 per share.

The issue generated significant interest from a number of high quality institutional investors across Asia, Europe and the US. A company statement to the exchange said that the proceeds of the offering would be used to augment the company’s capital base, enhance the strength of its balance sheet for its lending operations, provide seed capital to some of the funds that the company manages, to explore opportunities in principal investments and for general corporate purposes.

The 10-year old institution was promoted by the government during Chidambaram’s earlier tenure in the finance ministry. In recent years, the institution has shown ambitions of growing its business mix. In April, IDFC bought one-third stake in privately-held stockbroking firm SSKI. Last month, the company hiked its equity stake to 66.67%.

Read more in The Economic Times article.

IDFC prices QIP issue at Rs 127 per share

Infrastructure Development Finance Co Ltd said on Thursday it has priced its Rs 21-billion issue at 127 rupees per share. The company has offered 165,354,330 shares to Qualified Institutional Buyers, it said in a statement. The proceeds of the issue will be used to augment its capital base.

IDFC selling shares to mop up $500 mn

Infrastructure Development Finance Co. (IDFC), India’s biggest financier of public works, is selling $500 million (Rs2,050 crore) of shares to institutional investors, three people with knowledge of the matter said.

The sale, which began on Monday, will close on Wednesday and shares will be priced on 5 July, said the people, who declined to be identified before an announcement. The shares are being sold by auction or through book building, the people said.

“Several infrastructure projects will need large investments as India aims to increase its growth rate,” said R.K. Gupta, who manages Rs350 crore at Credit Capital Asset Management in Delhi and owns IDFC shares.

IDFC’s share sale follows a $5 billion offering by ICICI Bank Ltd, India’s biggest by market value, in June. The Mumbai-based company is raising money to meet demand for funds to build roads, ports and power plants in the world’s fastest growing major economy after China.

Citigroup Inc. and UBS AG are helping the lender sell the shares to banks, mutual funds, insurance companies and other big investors, according to a filing with the National Stock Exchange.JM Financial Consultants Ltd and Kotak Mahindra Capital Co. are also involved in the sale, the filing said.

Read more in The Livemint article.

IDFC to raise $500 mn via QIP route

The Infrastructure Development Finance Company (IDFC), the nation’s biggest infrastructure lender, has roped in Citigroup, UBS, Kotak Mahindra and JM Financial, to raise $500 million through share issuances to foreign and domestic institutions early next month.

This will be the biggest ever fund mobilisation through the Qualified Institutional Placement (QIP) route, after GVK Power & Infrastructure’s $300 million, handled by Kotak Mahindra, Citigroup and SSKI, and the $240 million issue by Max India, which was lead managed by CLSA.

IDFC’s roadshows for the QIP issue will start in the first week of July, said sources close to the development. The funds will be used to meet the growing demand from companies and the government to build ports, roads, power projects and other utilities.In the last eight months, 18 firms have raised more than Rs 4,500 crore ($1.09 billion) through the QIP route.

Read more in The Business Standard article.

IDFC to double stake in brokerage SSKI

Infrastructure Development Finance Company Ltd will raise its equity interest in brokerage SSKI to 66.67% from 33.33%.

IDFC and SSKI propose to pool their resources and expertise to provide investment banking and capital markets solutions, especially to infrastructure clients, the company said in a notice to BSE.IDFC share closed at Rs 131.45 on the BSE, up 1.15% from Monday's close.

Deal clinched: Vodafone gets all-clear call from FM

Vodafone cleared its last hurdle in acquiring a controlling stake in Hutch Essar with finance minister P Chidambaram giving his go-ahead on Friday. His approval comes within a week of the Foreign Investment Promotion Board giving its nod for the acquisition.

The FM’s approval should pave the way for Vodafone to secure management control of HEL and for the company to be renamed Vodafone Essar. Sources said as a first step, Vodafone will now be able to constitute a new 12-member board to oversee the operations of the company. Essar vice-chairman Ravi Ruia will be the chairman of Vodafone Essar and Vodafone chairman Arun Sarin will be the vice-chairman. Max India chairman Analjit Singh and HEL MD Asim Ghosh will also be on the board.

The approval comes as a welcome reprieve to Mr Singh and Mr Ghosh, whose 12.26% shareholding in HEL has been under scrutiny since the deal was announced in February.
The Vodafone-HEL regulatory saga, which saw the proposal being deferred thrice by FIPB, began in February soon after Vodafone announced it had agreed to acquire companies that controlled 67% in HEL from Hutchison Telecom for $11.1 billion. This had given rise to a controversy about whether the 15% held by Mr Singh, Mr Ghosh and IDFC should be counted as FDI.

Read more in The Economic times article.

List of Sharekhan's suitors gets longer

Sharekhan has got a queue of suitors, first it was JM Financial and then IDFC was believed to be in talks to buy out the brokerage firm. Now the buzz is that American online trading giant E*trade, and Goldman Sachs too have joined the list, with many in the broking industry claiming that E*trade is the frontrunner for the deal.

Interestingly, last year Sharekhan had seen a mass exodus when many of its employees joined IL&FS Investsmart where E*trade is a key investor.Sharekhan is only one of the many deals that the broking industry is looking to clinch.

Read more in The Moneycontrol article