Koutons files DRHP with SEBI

The retail garment brand Koutons has filed its draft red herring prospectus, DRHP with SEBI and intends to enter the capital market with an IPO as reported on Moneycontrol.

This comes after a round of PE funding from Passport India, UTI Ventures & Argonaut. Passport India Investments (Mauritius) has picked up 6,00,000 equity shares in Koutons Retail India for an investment amount of Rs 210 million. Passport has been allotted the equity shares at a fixed price of Rs 350 per equity share. With this infusion Koutons Retail India has raised an aggregate amount of Rs 1,216 million as private equity since June 2006. The earlier investors were UTI Venture Funds Management Company Private Limited and Argonaut Ventures.

As on February 28, 2007, the company had 26 manufacturing and warehouse facilities in and around Gurgaon, and a network of 674 retail outlets across India.

Schroders looking to join the AMC brigade

Schroders Plc, a 204-year-old London fund manager, wants to open a mutual-fund business in India to tap demand for investments among the world’s second-most-populous nation, reported the Business Standard.

The company, London’s largest publicly traded fund manager, is considering either a joint venture or entering the market on its own.

Assets of the money manager overseen for clients outside the UK now account for 56 per cent of the total, up from 43 per cent five years ago. India’s mutual-fund market has about $73 billion of client assets, according to Boston-based Cerulli Associates.

The Indian AMC market has seen many new players establishing presence in the recent past. JP Morgan & AIG have launched their maiden India Equity Fund. Amongst the Indian names, Edelweiss has recently been awarded the AMC license. All of this is expected to further deepen the market and offer more choices to the Indian investor

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Jet to raise capital through PE route

India’s largest private airline Jet Airways is in negotiations with private equity players Blackstone, TPG Capital and Temasek for raising Rs 400-450 crore reported the Economic Times.

The company is raising money for meeting the operational expenses of running the loss-making Air Sahara, which it recently acquired. The operational expenses for Jet are huge since Air Sahara is not very profitable. Reportedly TPG Capital is looking to co-invest along with Singapore-based fund Temasek, while Blackstone is considering going solo.

The promoters currently hold 80% stake in the company which will come down proportionately along with the other shareholders’ stake. The private equity investor may take 8-9% stake.

Jet Airways recently acquired Lucknow-based Air Sahara in a deal valued at Rs 2,300 crore. While Jet had paid Rs 400 crore upfront, it will pay Rs 550 crore in four annual instalments, starting next year. Air Sahara will be renamed JetLite and will be a 100% subsidiary of Jet Airways.

Related Articles:
Jet Airways to buy Air Sahara for around Rs. 1450 crores
Jet Airways seeking $400 mn via private equity

Zydus acquires Tokyo-based Nippon Universal

Cadila Healthcare today announced the acquisition of 100% stake in Tokyo-based Nippon Universal Pharmaceutical.

According to a release issued by Zydus to the BSE today, Nippon reaches out to more than 4,000 hospitals and clinics, and is expected to provide a fillip to the group’s operations in a market that is highly complex and dominated by local pharma Companies.

Pankaj R Patel, chairman and managing director, Zydus, said: “We had announced our intentions of being a long-term player in this market when we set up our subsidiary last year. Going forward, I believe this acquisition will unlock value for us as the generic market in Japan is just opening up, and post-2010 we expect this market to be a major growth driver for our global business.”

Read the article in Business Standard.

Navis Capital Partners approach Pritish Nandy for buying stake in his company

Pritish Nandy Communications (PNC) is considering to offer a small stake in the company to private equity (PE) funds . Navis Capital Partners is among the firms that has approached Mr Nandy. KPMG is handling the valuation and the due diligence process that is likely to get over in the next 3-4 weeks.

PNC is looking to release a slate of six movies this year, and is hoping to ramp up its production to about 10 movies annually in the next couple of years. The company is also eyeing the new media space, to look at alternate revenue streams via internet, mobile phones and cable television.

Navis Capital is a Malaysia-based PE player founded in 1998 to make investments in buyouts, recapitalisations and financial restructuring in Asia. The firm focuses on enterprises in Asia, particularly South and Southeast Asia. The firm manages approximately $ 1.5 billion in capital commitments.

PNC has just finished a qualified institutional placement (QIP) that saw the promoter’s stake falling from 41% to 30%. According to PNC’s latest shareholding pattern, Mr Nandy holds 21.79% while his wife holds around 4.32%. His daughters collectively hold less than 1%. Among the non-promoters, some firms from Mauritius hold nearly 7% in the company.

Argonaut leads $80 million funding of Cordy’s

Cordys Holding B.V., provider of industry-leading business process management suite (BPMS) enterprise software, announced the successful completion of $80 million equity financing representing the singlw largest round of funding for an independent, private BPMS vendor.

Argonaut Private Equity led the round with an investment of $67 million securing a ‘significant minority stake’ in the company, which could be anywhere between 20 and 33 percent.

Headquartered in the Netherlands, Cordys is a global company with over 520 employees in offices in the Americas, Europe, China and India. Cordys currently employs 250 people at its Asia development centre in Hyderabad which is the key to its ability to compete with larger incumbents,

With more than $2 billion under management, Argonaut Private Equity is a diversified global private equity fund. ‘This investment in Cordys demonstrates Argonaut’s commitment to investing in high potential business with strong ties to India,’ said Gagan Kapur, vice president, Argonaut Private Equity. With the investment in Cordys, the total investment by Argonaut in India has reached $170 million in diverse markets.

BMPS’ are the next generation of BPM software. BMPS’ pull together a broader set of tools to provide end-to-end lifecycle support of the business process all within a single model that is shared by all its enabling technologies.

Deloitte launches dedicated private equity practice in India

Deloitte Touche Tohmatsu India Private Limited is launching a dedicated private equity practice in India, to be called as Deloitte Corporate Finance Services India Private Limited. Deloitte Corporate Finance will work closely with the Asia Pacific regional practice, UK & US member firms of Deloitte Touche Tohmatsu and the rest of the DTT network.

Deloitte Corporate Finance will address the needs of the growing private equity market and provide investors with transaction-related services across the complete deal cycle from origination to completion. The team comprises professionals with significant experience in the global mergers and acquisitions and private equity services business and is led by Sandeep Gill, Managing Director and Bimal Modi, Director, who prior to transferring to India, were part of the corporate finance practice of Deloitte & Touche in London.

Deloitte Corporate Finance plans to address the needs of the fast-growing private equity market in India by providing specialist services which include due diligence, bid support,
sale and purchase agreement advisory and completion accounts work.

Read the pres release here.

London-based PE fund Promethean Investments initiates Promethean India with the Dabur Group; appoint ex-ITV chairman Peter Burt

Sir Peter Burt, ex-chairman of ITV, will become chairman of Promethean India, a new India-focused private equity fund, a spin-off of the Promethean private equity vehicle run by his son, Michael. The new fund will be listed on London Stock Exchange’s AIM market and is understood to have investors such as Bank of Scotland and Alliance Trust. Insinger de Beaufort has been appointed advisor to the company.

Promethean India will become the latest in a string of companies to tap the London markets for cash earmarked for India. It will be run by Mohit Burman, a member of the Dabur Group, which houses the Burman family’s business interests, such as financial services, pharmaceuticals, healthcare and retail.

Mohit’s brother, Gaurav, plays a senior role at Promethean Investments in London, and will also be involved in the running of Promethean India, which will be based in offices in Delhi and Mumbai. The fund is understood to have a pipeline of potential deals. It will also target Indian firms in need of operational or financial restructuring and others which are domestically focused but which have potential for international expansion.

Read the article in The Telegraph.

SRIT to acquire Agilent Technologies arm OSI

Sobha Renaissance Information Technology (SRIT), a Bangalore-based software company, is acquiring Objective System Integrators (OSI), a division of the $5 bn-test and measurement company Agilent Technologies, for an undisclosed amount. OSI will provide SRIT a strong foothold in the telecom management solutions space. The acquisition will be funded by SRIT through a combination of debt and internal accruals.

OSI provides software solutions for the integration and management of communications networks and is a major player in the operations support systems in the telecom sector. OSI was acquired by Agilent for $665 mn in 2000 when its revenues were pegged at around $70 mn. As of now, revenues of OSI are around $26-30 mn. It has around 120 people with presence in India and the US. This is SRIT’s second acquisition. Earlier, it had bought Billing Components, a German telecom software company.

SRIT focuses on three verticals, namely, healthcare, telecom and enterprises and currently has around 1500 people spread across 11 countries. It has registered revenues of around Rs. 200 crores for the FY07 and is targeting around Rs. 450 crores in FY08 with Rs. 280 crores coming in the telecom vertical. Currently, it gets 30% of its revenues from healthcare and telecom segment with the remaining from enterprises.

Read The Economic Times article.

Sharekhan to sell stake to private equity players

Sharekhan, the retail broking arm of the Mumbai-based SSKI Group, is raising funds from private equity players to finance its expansion. A few private equity players have already started due diligence on Sharekhan. However, there seem to be conflicting reports as to how much stake will be diluted.

As per Business Standard reports, the retail brokerage company may dilute close to 15% stake, as per Shripal Morakhia, promoter of Sharekhan. This will result in a dilution of stakes of all existing shareholders. The company is not disclosing the amount it is planning to raise. At present, the Morakhias hold 37% stake in Sharekhan, while its employees hold 15% and the rest is held by General Atlantic, Intel Capital and a group of funds advised by HSBC Private Equity India. In April 2006, General Atlantic invested about Rs. 144 crores ($31 mn) in the company through a combination of primary and secondary investments through buying out the entire shareholding of First Carlyle Ventures. Sharekhan is looking at expanding its presence in the country through organic growth. It is among the top five retail brokerage outfits in the country with over 100 branches across 150 cities.

Meanwhile, The Economic Times says that the promoters of Sharekhan are looking to dilute a majority stake (around 51%) to a strategic investor. The company is valued at around Rs. 750-850 crores and a 51% stake will be valued at Rs. 375-425 crores. The company is said to be in talks with a few investors and is considering all options including selling a majority stake to an investor or selling the entire company, according to Sharekhan CEO Tarun Shah. It is being said that Credit Suisse is one of the interested parties.

Jet Airways to buy Air Sahara for around Rs. 1450 crores

Jet Airways has agreed to buy out Air Sahara for around Rs. 1450 crores, lower than what it had agreed to pay (Rs. 2300 crores) in January 2006 when the two had signed a contract that got into trouble and litigation.

Both the airlines have seemed to have reached an agreement on the commercial aspects of the deal, which will be submitted to the arbitration panel on 12th April at 5.30 pm, after two days of hectic negotiations. The offer includes Rs. 500 crores that Jet had paid Air Sahara last year. However, it is unclear whether the deal includes the Rs. 300-350 crore-debt on the books of the latter. The offer will not include Rs. 180 crores that Jet had already paid in April 2006 for the normal business operations of Air Sahara.

Jet Airways, in January last year, had signed a share-purchase agreement to acquire 100% equity of Air Sahara. As part of the deal, Jet paid Rs. 180 crores for Air Sahara’s revival and Rs. 500 crores for Air Sahara shares besides depositing Rs. 1500 crores in an escrow account opened for the purpose. However, the deal got into trouble after Jet cited lack of government clearance as the reason to walk out of the deal. The matter then went to court that ordered for the arbitration.

Read more in The Economic Times.

JM Financial’s Infinite India to invest $400 mn in Indian real estate

Infinite India Investment Management, a private equity initiative anchored by the JM Financial Group, has launched a real estate fund. The fund plans to invest $400 mn in residential, commercial and retail sectors. Kartik Sharma, the Chief Investment Officer at Infinite India reveals that his decision is based on the fact that fundamental demand drivers in the realty sector are very strong, with respect to job creation and housing demand.

Kartik Sharma’s view of the Indian real estate market and opportunities:

On avenues of investment – Tier I and Tier II markets, where they have already made 5 investments; with capital being relatively tight in the market, in terms of debt capital and IPO action likely to be relatively slow for a little while, optimistic about private equity funds in providing finance for various real estate development projects

On direct participation in projects or backing existing companies planning to come into IPOs –done both so far and will actually continue to do both; invested in both project level investments as well as entity level deals

Time horizon for completely investing $400 mn and kind of returns expected – to invest the capital in the next 2-3 years; since investing in an emerging market illiquid security, expecting reasonable returns somewhere in the neighbourhood of 30%

On being bullish on the real estate sector given the inflationary pressures and the regulatory problems – fundamental demand drivers in terms of job creation and in terms of housing demand are very strong; also nascence of the Indian market with lots of pockets of inefficiency as well as in-house good expertise in terms of deal structuring

Ahmedabad-based Global Network signs JV with Michael Porter’s OTF Group

Ahmedabad-based Global Network is forming a joint venture company in India with US-based OTF Group, promoted by strategic management specialists Michael Porter and Michael Fairbanks. OTF Group is a management consulting firm specializing in providing frameworks and technology for building competitive clusters, especially in developing countries.

The joint venture will use the expertise and cluster development models of OTF and replicate similar models in the Indian small and medium enterprise (SME) sector. The JV will also provide technology for cluster development, including analysis, foreign marketing research and cluster selection and integration of data. The JV will help OTF to communicate with the government and identify the clusters and the areas to be developed. Under cluster development, the JV will try to create global and regional markets, instead of protected markets, with micro-economic focus, flexible and meritocratic organizations and informed investment choices with support from development partners.

Article in Business Standard.

IL&FS Investment Managers invests $100 mn in real estate startup QVC Realty

IL&FS Investment Managers Limited (IIML), the private equity arm of IL&FS, has invested $100 mn in QVC Realty, a real estate startup, making it the first venture capital-backed real estate start-up in India. QVC Realty is promoted by Prakash Gurbaxani, who was heading the real estate joint venture between Tishman Speyer and ICICI Ventures.

The initial investment has already been deployed to buy a 100-acre plot near Gurgaon. QVC will develop a township on this land in the next three years. Talks are also in an advanced stage for setting up another township of similar size in Bangalore’s periphery. In four years, the combined capital value of the two projects is expected to touch Rs. 3000 crores. The two partners have not yet decided on a fixed profit sharing ratio. However, the management (QVC and IIML) may take their respective stake on delivery of projects. IIML has also committed to partner QVC in all its future real estate projects.

IIML’s investment in QVC will be modular. Depending on the evaluations of the project, IIML will arrive at how much stake will be swapped and the profit sharing ratio. Currently, the equity raised will be used to finance the purchase of land. For the further development, QVC may take the debt route.

Article in DNA Money.

Rajan Raheja-promoted Hathway Investments buys 39% in ING Vysya Mutual Fund

The Economic Times reports that Hathway Investments, a company promoted by realtor Rajan Raheja, has bought out ING Vysya Bank’s entire 39% stake in ING Vysya Mutual Fund for an undisclosed sum. Post this deal, ING will hold 42.5% in the fund, Hathway 39%, and existing Indian shareholder Kirti Equities, will retain 18.5%. The fund would be renamed as ING Mutual Fund. The asset management company’s total assets under management as on March 31, 2007, were close to Rs. 3630 crores. For the year ended March 2006, the AMC had reported a net loss of Rs. 21 crores. This could have depressed the valuation of the fund house, which usually ranges from 4-6% of assets. Hathway, which earlier held a 25% stake in Franklin Templeton, is estimated to have pocketed around Rs. 300 crores from the sale of its stake, less than six months ago.

Bharati Shipyard buys out UK-based shipyard company Swan Hunter

India’s second-largest private sector shipbuilder Bharati Shipyard is acquiring UK-based Swan Hunter Shipyard for an undisclosed amount. The entire machinery and equipment from Swan Hunter will be dismantled and brought to India over six months to be re-built at Bharati’s shipyards. The acquisition might be one of the biggest deals till date in the domestic shipbuilding industry. A comparable new shipyard would have cost Rs. 200-250 crores.

Swan Hunter is a 130-year old shipyard engaged in shipbuilding, ship conversion and construction of offshore structures. It has built over 1600 ships of various types, including more than 400 naval vessels, which includes two aircraft carriers. Swan Hunter has the capacity to build vessels of up to 100,000 dead weight tonnes (DWT).

Through this acquisition, Bharati Shipyard is expected to have fully automated panel line, quayside traveling gantry cranes of up to 180-tonne capacity, 30 overhead traveling cranes of up to 60-tonne capacity, plate rolls, bending presses, robotic profiling machines, and digitally fed plasma burning equipment. This will enable Bharati to build ships and vessels with the capacity of up to 60,000 DWT. Bharati will also acquire the 20,000-ton lift capacity floating dock of Swan Hunter, which will add a lot of value to its existing operation.

Read more in the Business Standard article.

Mumbai-based machine engineering firm makes Canadian acquisition

Mumbai-based machine tool and engineering company Batliboi Limited has acquired Canadian firm Quickmill, Inc. for an estimated Rs. 22 crores.

This is Batliboi’s first acquisition, the logic behind it being leveraging on Quickmill’s distribution network and research and development capabilities. The acquisition will help Batliboi to establish its presence in North-America where Quickmill enjoys around 75% market share in the heat exchanger segment. The company plans to use Quickmill’s distribution network in North America, and utilize its strong R&D capabilities and in turn, conduct detailed engineering for Quickmill’s machinery equipment, heat exchangers, aerospace dies and moulds, bridge-building machinery and other Quickmill products in India.

Batliboi primarily manufactures machine tools, specialized machines, textile air engineering machines and air conditioners at its Surat and Bangalore facilities. The company’s clients include textile manufacturers, automobile manufacturers and power equipment makers, besides hotels which use its air conditioners and refrigerators.

Read the article in The Economic Times.

Barclays Capital appoints Sanjay Mathur as Director

The Economic Times reports that Barclays Capital, the investment banking arm of global financial group Barclays, has appointed Sanjay Mathur from UBS as Director, Rates Research for its Asian operations (excluding Japan). Mathur would lead the firm’s coverage of macro-economic research on the Indian subcontinent, Malaysia and Singapore. Prior to this, Mathur was working as Executive Director in the regional economic team of global financial firm UBS.

US-based PE firm Jacob Ballas invests $10 mn in biotech firm Avesthagen

US-based private equity firm Jacob Ballas Capital is close to buying a minority stake in Bangalore-based biotech firm Avestha Gengraine Technologies, popularly known as Avesthagen, for about $10 mn. Jacob Ballas’ $10 mn investment will be $5 mn in equity and $5 mn in warrants. The deal is being structured at Rs. 1850 per share, and values the company at $124 mn.

Jacob Ballas is an India-focused private equity firm floated by New York Life Investment Management, a wholly-owned subsidiary of New York Life Insurance Company, Singapore-based Excelfin, Indo-Pacific Estates and India’s construction-engineering firm Punj Lloyd.

Avesthagen had recently raised $32 mn from Fidelity Investments and France-based biotech majors BioMerieux and Limagrain and the food giant Danone. The company has also raised $5-7 mn from Indian corporates such as the Godrej, Cipla, the Tata Group, and ICICI Ventures. ICICI Ventures and Fidelity hold 19% and 10% stake, respectively, in the company while other strategic investors hold 4-6% stake.

Avesthagen is into biopharmaceuticals, bio-nutritionals and bio-agriculture, and also has a portfolio of heath foods, including biscuits and breakfast cereals. Jacob Ballas’ fund infusion will be used for the company’s proposed acquisitions and patent filings. Avesthagen is in the process of acquiring two domestic seed companies to deploy technology that it has developed in the agri-biotechnology business and is in talks with at least five Indian seed companies for possible acquisitions. The capital expansion is also being done to set up manufacturing facilities to upscale production, before moving into phase two of research and development.

Read The Economic Times article.
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Trent partners PE real estate firm Xander for retail expansion

Trent, a Tata group company, has tied up with global private equity investor Xander for developing real estate properties for its various retail ventures. As per the agreement, Xander will invest in the development of an institutional retail real estate portfolio in the country. Trent will have anchor tenancy rights and manage the portfolio with Xander. Currently, Xander invests in the Indian real estate market through Xander Master Fund, a real estate fund.

Xander Real Estate Partners, part of the Xander Group, recently bought a 20% stake in a joint venture between Reliance Industries and the Maker Group, to develop commercial, residential and retail real estate in Bandra-Kurla Complex in Mumbai. The 20% stake was reportedly valued at over $100 mn.

Read more in The Economic Times article.

Suzlon acquires 7.7% of REpower; raises bid to €150 per share

Indian wind power major Suzlon Energy has revised its offer price for REpower Systems of Germany to €150 per share, with an acquisition of 7.7% stake in the German firm. Suzlon has purchased 627,000 shares of REpower Systems through it two step-down, wholly-owned subsidiaries, SE Drive Technik GmbH and Suzlon Windenergie GmbH. With this acquisition, the company has revised the offer price of the voluntary public tender offer to €150 from the €126 for acquiring up to 100% share of REpower. Suzlon has teamed up with Martifer, a unit of Portugal’s largest builder, Mota-Engil, to launch a bid for REpower. Martifer owns more than 25% of REpower.

Earlier in March, French nuclear power firm Areva offered €140 per share for REpower, raising its previous offer of €105 by a third, to top Suzlon’s bid of €126 per share.

Read The Economic Times article.
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Private equity investors to buy 24% in NDTV Networks

A number of private equity investors including Lehman Brothers, Goldman Sachs, Credit Suisse, etc. would acquire nearly 24% stake in NDTV Networks, a wholly-owned subsidiary of NDTV India, for $120 mn. NDTV Networks is a UK-based company and has five companies in its fold. It holds 100% in NDTV Labs, which will develop market and sell software and technology products; NDTV Imagine, which will operate a non-news Hindi mass entertainment channel; NDTV Lifestyle, which will provide content to TV channels in India and abroad; and NDTV Convergence, which would house all dotcom and mobile properties of the group. NDTV Networks also owns 50% in NDTV Media Services with Genpact for media process outsourcing.

NDTV India controls news channels, NDTV 24×7, NDTV Profit, among others. The company is also believed to have scrapped its initial public offer for the moment and may reconsider it later.

Read the Business Standard article.

Carlyle teams up with Ramesh Vangal to acquire Cambridge Solutions

Private equity giant Carlyle along with serial entrepreneur Ramesh Vangal are said to be the frontrunners in acquiring Cambridge Solutions, one of the largest listed BPO companies. Carlyle may purchase 42% of the other promoters’ stake for sale at $170 mn. The joint bid would control around 60% stake, valued at around $250 mn, in the acquired company, thus valuing the company at an EV of $400 mn. Other firms in the fray include bidders like global IT major EDS, PE firm Apollo and Indian IT company HCL.

The Cambridge acquisition will be Carlyle’s largest investment in India till date. The PE major is joining hands with Mr. Vangal, a co-founder and the largest individual shareholder in Cambridge with 18% stake, is assisting Carlyle in effecting a buyout.

Carlyle’s move to buy is seen in the context of Cambridge, which has substantial revenues locked up in the insurance processing domain that could unleash synergies given its rather large exposure to the insurance sector in the US. Almost two-thirds of Cambridge’s Rs. 1200 crore-revenue comes from high-end BPO operations spread across the US, India and Europe. It has a strong presence in the lucrative insurance processing domain, with around 2000 of its total 4500 employees located in the US.

Read more in The Economic Times article.
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IIFC to raise $500 mn through the ECB route; Standard Chartered appointed as lead arranger

India Infrastructure Finance Company Limited (IIFC) will raise $500 mn through the external commercial borrowings (ECB) route. Standard Chartered Bank will be the lead arranger to the issue. The funds are being raised for a period of 10 years. The resource will be used for financing some major infrastructure projects in the country.

During 2007-08, IIFC, a wholly-owned special purpose vehicle of the Indian government for core sector lending, intends to sanction some 46 projects, aggregating Rs. 15,000 crores and disburse nearly Rs. 3000 crores. A major chunk of this Rs. 3000 crores funding requirement will be met through overseas borrowings.

IIFC’s paid-up capital is Rs. 100 crores. It sanctions loans up to 20% of the project cost. Out of the 46 projects which are under the IIFC’s consideration, 31 are road development ventures, 12 are power projects, 2 are port-related infrastructure ventures, while 1 is an airport project. To ensure proper usage of funds, IIFC has appointed ICRA to work out a detailed business roadmap. ICRA is expected to submit the report within a month. It will also recommend an HRD strategy suited to IIFC’s needs.

Apart from some of major infrastructure projects, IIFCL is also working with the municipal corporations and urban local bodies to develop urban infrastructure projects. IIFC has tied up with IDBI, Canara Bank and IL&FS to create a Rs. 3000 crore-pooled municipal debt obligation (PMDO) facility. The fund will be channelized for urban infrastructure development.

Read more in The Economic Times article.
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BPO service providers Sutherland, Genpact plans IPO on US bourses

The Economic Times reports that following the lead of the listing of its peers EXL Service Holdings and WNS on NASDAQ and NYSE, respectively, Sutherland Global Services, a US-based third party BPO service provider, is planning a NYSE / NASDAQ listing by the last quarter of 2007 to raise around $250 mn. Private equity firms Oak Investment Partners and Standard Chartered Private Equity (through its Merlion Fund) are invested in Sutherland. Sutherland offers services including process consulting, back-office processing, account management, customer care, technology support across verticals such as technology, telecom, retail, healthcare and banking, financial services and insurance (BFSI). It has about 18,000 professionals on its global rolls, 50% of them based in India and has other global facilities in locations like Mexico, Canada, and the Philippines.

Meanwhile one of the India’s largest BPO firms Genpact is mulling a US listing through an initial public offering to raise over $600 mn for the company and its promoters. The company, previously part of the US-based industrial conglomerate General Electric, is planning to offload about 15% equity through a public float on NYSE / NASDAQ later this year. The company’s major shareholders, GE and US-based private equity firms Oak Hill Capital and General Atlantic, are likely to sell part of their holding through this IPO, valuing the company at around $4 bn. Genpact has appointed Morgan Stanley, JP Morgan and Citigroup for the offering and it may file the regulatory prospectus in the next few weeks.

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Calcutta Stock Exchange facing problems in demutualization

The Calcutta Stock Exchange (CSE) seems to be facing a huge problem in its demutualization scheme. After having failed its original deadline for soliciting expressions of interest (EoIs) on March 23, it has again failed in its efforts to rope in strategic investors, as it has received insufficient response to the revised deadline of March 5. It is now further extending the date for submitting EoIs to April 30.

The CSE and its consultant-advisor PriceWaterhouseCoopers are conducting road shows within India and overseas to hard-sell the benefits of picking up a stake in CSE. PriceWaterhouseCoopers has already made presentations to leading bourses in Asia. Some of them are interested, but the main hindrance is the 5% limit in investment

As per SEBI guidelines, all exchanges have to divest 51% to financial institutions (FIs), foreign institutional investors (FIIs) and corporate bodies other than broking outfits before August 2007. The guidelines state that no individual investor, be it FIs, FIIs or corporates, can hold more than 5% in an individual capacity in any stock exchange. The collective holding of the non-brokers would be 51%, whereas brokers would hold 49%.

Currently, there is very little trading which happens on the CSE, which was once India’s third largest bourse with a daily turnover in excess of Rs. 1000 crores.

Read the article in The Times of India article.
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Citigroup in talks to buy to hedge fund Old Lane for $600 mn; fund boss Vikram Pandit may get to head Citi’s alternative investments unit

Global banking giant Citigroup is in talks to buy Old Lane, a hedge fund firm co-founded by ex-Morgan Stanley senior executive Vikram Pandit. If such a deal happens, Mr. Pandit would probably be on his way to heading the bank’s alternative investments unit, and probably, also the top job at the world’s largest bank.

The purchase price for Old Lane is estimated to be around $600 mn. Old Lane is thought to have more than $4 bn of assets under management. The alternative investments unit is the smallest of Citigroup’s four main businesses. In 2006, profit at the unit fell 11% to $1.28 bn, and revenue dropped 15% to $2.9 bn. The unit at year-end oversaw $49.2 bn of assets, including $10.7 bn of Citigroup’s prop money.

Vikram Pandit is a former head of Morgan Stanley’s institutional securities division. Once considered a potential successor to former Morgan Stanley chief executive Philip Purcell, Pandit left the investment bank in March 2005 as part of an exodus of senior bankers and traders. He later founded Old Lane with his Morgan Stanley colleagues John Havens and Guru Ramkrishnan.

Read more in The Economic Times article.

Major financial houses in race to acquire UTI Securities stake

Major international financial powerhouses Citigroup, Macquarie Bank, Standard Chartered, Societe Generale and Kuwait-based Global Investment House are in the race to acquire 49% stake in UTI Securities. UTI Securities is currently owned by the Securities Trading Corporation of India (STCI).

STCI had bought 100% stake in UTI Securities for Rs. 265 crores in 2006 from the Specified Undertaking of UTI (SU-UTI). It is now looking to sell 49% stake to a strategic partner. As per the deal, STCI has a minimum lock-in of 51% stake in UTI Securities for three years, which will end in 2008.

The company will now divest 49% stake to a strategic partner, preferably a foreign investor, considering the expertise they would bring in. The talks were at an advanced stage and a prospective strategic partner would be short-listed soon.

Read more in the Business Standard article.

Texas Pacific among other PE firms in race to acquire Air Deccan stake

US-based private equity giant Texas Pacific Group is among three others who are in talks with low-cost carrier Air Deccan for picking up a minority stake. Air Deccan is planning to raise around $100 mn, to be utilized for expansion, by diluting 5-7% stake to private equity firms, and has mandated Edelweiss Capital (see Related Post) for the same.

Edelweiss has short-listed 3-4 players willing to invest in Air Deccan, and a deal is likely to be signed in the next 10 days. Among them, Texas Pacific has emerged as the most aggressive bidder. Texas Pacific has made investments in airlines globally. However, it had dropped its plans to invest $30 mn in Delhi-based budget carrier SpiceJet owing to differences in valuation.

Indian airliners are tapping private equity avenues for shoring up capital to strengthen their balance sheets and to meet their expansion needs. SpiceJet has raised nearly Rs. 300 crores from private equity firms, while the Chennai-based Paramount Airways has managed to get over Rs. 80 crores. Meanwhile, full-service carriers such as Kingfisher Airlines and Jet Airways are also in talks with private equity for raising funds.

Read the article in the Business Standard.
Related Post:
Texas Pacific pulls out of investing in SpiceJet

House of Pearl acquires Gurgaon-based Texport Fashions

Apparel company House of Pearl Fashions Limited has acquired textile exports firm Texport Fashions, for just above $1 mn. Texport will exclusively handle orders from departmental store chain JC Penny of the US. House of Pearls is also looking to acquire another facility in Bangladesh.

The new Gurgaon-based facility will also be used by the House of Pearl for servicing its international clients. It has recently received an order of $8-10 mn from JC Penny and the entire production at the newly acquired unit would be used to meet this demand. House of Pearl has concentrated on the woven segment till now but the acquisition of the Gurgaon facility would help it establish a stronghold in the knits segment as well and would also contribute $15 mn to the company.

With regards to the unit at Bangladesh, where House of Pearls already has a presence, the company may run the facility with a joint venture partner with the details to be worked out in a month’s time.

Read The Economic Times article.

NetWeb Solutions acquires WebPercept from JV partner Percept Holdings

The Economic Times reports that media company Percept Holdings has sold its 51% stake in WebPercept, an online and digital media agency, to its joint venture partner NetWeb Solutions. The JV was established in 1999-2000. Post acquisition, WebPercept will be re-christened id8 Labs. NetWeb plans to build id8 Labs into India’s first fully integrated online and digital media agency. The company plans to merge its existing business franchises – under Intentias, its brand in SEM & Media, IMACS (brand in online research) and the NetWeb brand in application development – into id8 Labs. id8 Labs will invest $5 mn in the next 12-18 months through internal accruals, promoter funding and strategic investments to expand its franchise in India and global markets through offices in Dubai and Singapore.

Morgan Stanley to acquire 20% in Indian hospitality company IHHR Hospitality for $35-40 mn

Global investment bank Morgan Stanley is close to picking up 15-20% stake in IHHR Hospitality for $35-40 mn. IHHR owns the Ananda and Ista brands of spas and hotels. It is currently in the process of expanding its footprint in Delhi, Hyderabad, Pune and Ahmedabad with plans to have nine properties under the Ista brand over the next three years. Morgan Stanley will have a position on the board of the company,

The company first set up its flagship property Ananda in the Himalayas in 1998. The second spa resort, Shanti Ananda Maurice, was opened in Mauritius late last year. IHHR forayed into the business hotel segment in April 2006 by opening Ista Bangalore.

Read more in The Economic Times article.

Malaysia’s Astro to invest $166 mn in Sun TV for 20% stake

The Economic Times reports that Malaysian direct-to-home (DTH) service provider Astro will invest $166 mn (€124.1 mn) for a 20% stake in Sun Direct TV, promoted by the Sun TV Network, one of India’s largest television station operators. The new venture aims to provide direct-to-home satellite TV services in India. It expects the new company to incur losses for the first five years, but aims to capitalize on India’s satellite TV market which is expected to add another 150 mn households in the next decade.

Macquarie Bank planning a $1 bn India infrastructure fund

Australia-based Macquarie Bank is setting up a $1 bn India-centric infrastructure fund. Macquarie is one of the largest managers of infrastructure funds in the world, and manages infrastructure assets worth $22 bn worldwide. It is likely to set up the fund through its infrastructure subsidiary, Macquarie Infrastructure Group (MIG). Though the bank is yet to make a formal announcement regarding the fund, it has reportedly already started evaluating deals and projects.

Macquarie is the second global financial services provider looking at an India-dedicated infrastructure fund. The first has been announced by Citigroup which is rolling out a dedicated infrastructure fund in partnership with IDFC and the backing of the Ministry of Finance.

Macquarie Bank started its Indian operations in 2005 and is currently focusing on its securities and research business. The proposed fund would mark its foray in asset management in India. While Macquarie’s infrastructure funds are listed on the Australian Stock Exchange, its proposed India-based entity may not list on the Indian bourses. The company recently started its infrastructure funds in Singapore and Korea both of which are listed on the local bourses.

Read more in The Economic Times article.
Related Post:
Citigroup, Blackstone, IDFC, IIFC tie-up for $5bn India Infrastructure Financing Initiative fund

JP Morgan to form asset reconstruction business with Yes Bank, Bank of Baroda, Bank of India and Union Bank

JP Morgan is setting up an asset reconstruction company in India along with public sector banks Bank of India, Bank of Baroda, Union Bank of India and private sector bank Yes Bank. The group has applied to the Reserve Bank of India (RBI) for its approval. JP Morgan will act as the knowledge partner in the joint venture, which will have an initial capital of Rs. 100 crores. If and when the RBI’s approval is received, the four India banks will form a company in which JP Morgan will pick up a 27% equity stake. For this, it will have to get the permission of the Foreign Investment Promotion Board, since the investment will be treated as foreign direct investment. At present, the cap on FDI in asset reconstruction companies is at 49%.

Union Bank was earlier supposed to partner Standard Chartered Bank in the latter’s ARC set-up. However, due to delays, Union Bank has now switched over to the JP Morgan side of the business.

Read more in the Business Standard article.
Related Post:
JP Morgan to set up asset reconstruction business in India

Credit Suisse poaches Ritchie Capital senior management for heading Asian private equity ops

Business Standard reports that Credit Suisse has hired Harjit Bhatia from Ritchie Capital to head Credit Suisse Private Equity Asia and has roped in a team of six professionals for the same. The team comprises Hemang Raja, Rakesh Mital, Soma Ghosal Dhar, Isiah Zhang and Imelda Tham. Heath Zarin, who started Credit Suisse’s Asian private equity investment activities, will also be joining the team. Harjit Bhatia, Rakesh Mital, Isiah Zhang and Imelda Tham will be based in Hong Kong, and Hemang Raja and Soma Ghosal will be based in Mumbai.

Harjit Bhatia is joining as managing partner and head of Credit Suisse Private Equity Asia. He was till recently chairman and CEO, Asia Pacific of Ritchie Capital Management in Hong Kong. Hemang Raja and Rakesh Mital are joining as managing directors. Prior to joining Credit Suisse Hemang Raja was the head of India operations for Ritchie Capital. While Rakesh Mital worked closely with Bhatia at Ritchie Capital. Also joining the team are Soma Ghosal Dhar, previously a director at Ritchie Capital in India; Isiah Zhang worked at McKinsey in China prior to joining Ritchie Capital; and Imelda Tham, who worked at the Carlyle Group in Washington DC in real estate acquisitions before Ritchie Capital.

Mid-cap PE fund Aureos Capital to acquire strategic minority stake in telecom firm Ordyn Technologies for $8-10 mn

Aureos Capital, a global mid-cap private equity fund managing small and medium enterprise (SME) assets worth over $600 mn worldwide, will make its third Indian investment by acquiring a strategic minority stake for $8-10 mn in Bangalore-based, six-year old telecom equipment company Ordyn Technologies. Aureos’ investment is part of Ordyn’s fund-raising to bolster its R&D. Aureos is leading the investment into the company with India Infoline pumping in another $3-4 mn (Rs. 20 crores).

Ordyn offers product line in the optical networking space, a niche area but big enough for nearly 3-4 large players. Tejas Networks is the only other Indian player in this market, competing with global players like Huawei, Febcom among others. Ordyn with a client list that include names like Reliance, Ericsson and Nokia raked in revenues of Rs. 55 crores in its first commercial year FY 2007 and hopes to cross Rs. 200 crores by FY 2009.

Ordyn intends to use the proceeds of this round of funding for scaling up its operations including increased R&D for designing next generation products and for expanding its international operations. The company currently spends Rs. 15-20 crores in R&D initiatives.

Read The Economic Times article.

The Tata Group restructures shareholding pattern in North Indian Plantation Operations

The shareholding pattern of Amalgamated Plantations Private Limited (APPL), the new company formed by Tata Tea after restructuring its North Indian Plantation Operations (NIPO), is close to finalization. The Tata Group will hold 33-35% in APPL through Tata Investment Corporation (15%) and Tata Tea (18-20%). IL&FS and the World Bank private equity firm IFC will hold 20% stakes each in APPL, while consultancy firm Globally Managed Services will hold 12%. The balance 13-15% will be held by employees and workers of the company.

The company has received SEBI approval for the formation of APPL. Once we get shareholders’ approval, the company will come into existence with effect from April 1, 2007. The transaction process, however, remains to be completed.

Read more in The Economic Times article.
Related Post:
Tata Tea to divest stake in tea plantations to IFC, IL&FS, workers

US paints company Sherwin-Williams to acquire Nitco Paints

Cleveland-based, US paint major Sherwin-Williams marked its maiden entry into the fast-growing Indian paints market by agreeing to acquire Nitco Paints, an unlisted unit of Nitco Tiles, for an undisclosed amount, assumed to be on the lower side of Rs. 200 crores. Sherwin-Williams has also paid an undisclosed sum towards maintaining ties with flagship company and group concern Nitco Tiles. Nitco Tiles is expected to benefit due to the symbiotic relationship between tiles and paints and a common customer base. The Indian management would be retained for now to enable Sherwin-Williams to have a better understanding of the local market. Later, the company would explore the products and technologies to be introduced in India.

Nitco Paints makes and sells exterior specialty paints in western India through a network of about 3,000 dealers. It posted sales of Rs. 80 crores last year. The acquisition will give the US-based company an established presence in the Indian paint industry, which has historically grown by 1.5 to 2 times of the Indian GDP on a year-to-year basis.

Sherwin-Williams is present in other emerging markets such as China, Uruguay, Brazil and Argentina. The company has a distribution network in 20 other countries through wholly-owned subsidiaries, joint ventures and licenses of technology, trademarks and trade names.

Read The Economic Times and the Business Standard articles.
Related Post:
Sherwin Williams pursuing business options with Nitco Paints

Standard Chartered may buy stake in sick pharmaco Morepen

A Standard Chartered Bank investment arm may acquire stake in the ailing pharma company Morepen Labs, after New York-based and Asia-focused private equity fund Avenue Asia walked out of the deal last week. As per the latest debt restructuring plan, Standard Chartered and the key promoter of Morepen, Sushil Suri, will infuse Rs. 100 crores each in a bid to revive the company. Avenue Asia had earlier committed to invest Rs. 150 crores in the company, before they walked out of the deal.

The company has informed the stock exchanges that it would issue 24.4 mn equity shares and 53.6 mn warrants. These warrants will be issued to the new investor and the promoter; both will have the rights to subscribe to the equity of the company. However, the company has not officially announced the new investor. The warrants will be issued at Rs. 20 per share.

Read The Economic Times article.

ICICI Bank re-jigs i-banking operations

India’s largest private sector bank ICICI Bank has restructured its investment banking division, giving it a ‘global’ appellation and new functional lines. The reason cited for the exercise has been the global opportunities emerging through Indian corporates, and the bank’s need to grow beyond trade finance and working capital to corporate advisory, deal origination and M&A funding. Investment banking provided roughly 30% of ICICI Bank’s profit of Rs. 2285 crores in the nine months to December 31, 2006.

The restructuring of i-banking operations has been as follows: Corporate Products & Investment Banking Group has been renamed as the Global Investment Banking Group (GIBG). ICICI Securities, the existing wholly-owned investment banking arm of ICICI Bank, will now focus only on equity markets and research. The investment banking business of I-Sec will shift to GIBG, while the retail equity brokerage part of ICICI Bank, called ICICIDirect.com, is now a part of ICICI Securities. GIBG will have three groups under it: Global Structured Finance & Advisory Group (GSFAG), Financial Institutions and Syndications Group (FISG) and International Syndications Group (ISG).

GSFAG will be responsible for banking products across India and all international markets. FISG will work with GSFAG and ISG for domestic syndication, and with the Balance Sheet Management Group for resource-raising and securitization. It will handle the needs of financial institution clients. For deals where the approving authority requires an amount of the facility to be sold-down or syndicated in the domestic market, the FISG will approve the terms of the facility. It will also originate deals for sell-downs directly, along with GSFAG. FISG will include the Capital Markets Division and the Global Custodial Services Group of the bank. ISG will work with GSFAG and FISG for all international syndications of corporate issuances for Indian as well as international clients. It will approve terms for sell-downs / syndications in the international market and also, along with GSFAG originate deals directly for the specific purpose of sell-downs.

Read the article in DNA Money.

Zensar Technologies forms JV with Japan-based EZA

IT and BPO solutions provider Zensar Technologies Limited is forming a joint venture with Tokyo-based IT firm EZA Limited to create Zensar Advanced Technologies to further strengthen its footprint in the emerging Japanese market. The transaction would involve the transfer of all EZA’s existing order book, employees, technology, and intellectual property to the newly formed joint venture.

EZA was incorporated in 1996 and had a turnover of $4.2 mn in 2006, and brings in over 10 years of strong industry experience in Japan. The company has over the years developed products in media server, digital appliances and security space. Its customers include NEC, Japan Railways and Unisys and other retail customers. Having gained technology and domain expertise pertaining to mobile terminals over the years, EZA is now focusing to enter the digital home appliances and security markets.

Read the article in Business Standard.

Saraswat Co-operative Bank planning to acquire 4 regional banks

After its successful merger with Mandvi Co-operative Bank in October 2006, Saraswat Co-operative Bank is eyeing four other banks to merge with by June 2007. The banks under consideration are Murgha Rajendra Co-operative Bank and Annasaheb Karale Bank based in Sangli, and the Nashik People Co-operative Bank and Kolhapur Janta Sahakari Bank based in Nashik and Kolhapur, respectively.

Saraswat has already signed a deal with Murgha Rajendra and Annasaheb Karale, whereas the due diligence is on for Nashik People and Kolhapur Janta Sahakari Bank. 11 branches each of Annasaheb Karale, Murgha Rajendra and Kolhapur Janta and 14 branches of Nashik People will be taken over. Saraswat Bank will absorb 200 employees from Murgha Rajendra and 160 employees from Annasaheb Karale.

Read the article from DNA Money.

Hindustan Lever sells Sangam Direct to Spinach promoter Wadhawan Food Retail

Unilever India Exports, a 100% subsidiary of Hindustan Lever, will sell is direct selling business Sangam Direct to Wadhawan Food Retail, for an undisclosed sum. Sangam Direct is a non-store home delivery retail business, while Wadhawan Food Retail operates the Spinach chain of food and grocery stores.

The Sangam business was conceptualized by Hindustan Lever in 2001 to experiment with the direct-to-consumer channel combining the twin benefits of convenience and value. The idea was to test market it in Mumbai under the brand Sangam Direct before taking a decision to extend it across the country. The decision for a larger roll-out was put on hold since Hindustan Lever felt it was not in its strategic interest to continue to be present in this format of organized retail.

Wadhawan Food Retail, is currently present in Mumbai through Spinach, which has about 23 outlets in the city. The Wadhawan Group has diversified business interests including Dewan Housing Finance Limited, a private sector housing finance company.

Read the Business Standard article.
Related Post:
Wadhawan Food Retail close to acquiring HLL’s Sangam Direct

Hershey forms JV with Godrej Foods; acquires 51% stake in latter

Renowned US-based chocolate maker Hershey has announced a joint venture with Godrej Beverages and Foods Limited, a subsidiary of diversified conglomerate Godrej Industries. The JV, named Godrej Hershey’s Foods and Beverages Limited, would manufacture and distribute confectionery, snacks and beverages across the country.

Under the deal, Hershey will acquire 51% stake in Godrej Beverages and Foods for $60 mn. The parent company Godrej Industries and Hershey will hold 43% in the new venture, and the remaining 6% will be held by JV CEO A Mahendran. Hershey is acquiring 40% from IL&FS which is exiting the venture. Hershey would license to Godrej Foods some of its trademark rights for $2 mn, in addition to royalty payments of less than 5% for domestic sales and 8% for exports. Hershey may also use the facilities of GBFL as a manufacturing base for the company in India. The new entity would get two of Godrej Foods’ existing manufacturing facilities at Mandideep and Chittur.

Read more in The Economic Times article.
Related Post:
Hershey to buy 51% stake in Godrej Beverages & Foods

Global Hospitals buys Chennai-based Sankara Hospital for Rs. 257 crores

Hyderabad-based Global Hospitals, part of Ravindranath GE Medical Associates, has acquired Sri Kanchi Kamakoti Sankara Hospital (formerly Tamilnad Hospital) in an all-cash deal, for Rs. 257 crores. The amount would be paid in tranches. The Chennai-based Sankara Hospital is spread over 46 acres and has 450 beds.

In July 2006, a division bench of the Madras High Court had permitted the Sri Kanchi Kamakoti Peetam Charitable Trust to sell the Sankara Hospital. The trust, in its application to sell the hospital, said it could not run it and had become heavily indebted. Subsequently, corporates and healthcare majors, including the Murugappa Group, Satya Sai Hospitals of Chennai, Bangalore-based Shriram Properties, Kolkata-based Advanced Medical and Research Institute and Global Hospitals bid for the property. Global emerged winner by quoting Rs. 257 crores and assured that it would run the existing hospital, retain the employees and provide 50 free beds.

Global Hospitals plans to transform the Sankara Hospital into a ‘Health City’ by incorporating facilities like liver, kidney and a multi-organ transplant institute, a heart and lung institute, neurosciences, trauma, orthopedic and cancer institutes and providing alternative therapy in the next 5-10 years at an investment of around Rs. 750 crores. The acquirer also plans to construct service apartments, and subsequently, also increase the number of beds to 1000.

Read more in the Business Standard article.

Financial Technologies sells 1% in Dubai commodity bourse for $12.5 mn

Indian IT company and MCX promoter Financial Technologies has sold a 1% stake in its Middle East-based venture, the Dubai Gold and Commodities Exchange (DGCX), to its partner, the Dubai Multi Commodities Centre (DMCC). The size of the deal is around $12.5 mn valuing the year-and-a-half old DGCX at $1.25 bn. Financial Technologies would now hold a 49% stake in DGCX.

DGCX is an electronic futures and options exchange which utilizes trading, clearing and settlement technology developed by Financial Technologies. The exchange lists futures contracts in gold, silver, currencies and fuel oil. It has recently announced the imminent launch of futures contracts in steel and options contracts on gold. DGCX has also foreshadowed the future listing of various agricultural, metal, and energy products.

Read the article in Business Standard.
Related Post:
MCX may divest stake to Dubai Multi Commodities Centre

Central Bank to come out with IPO; issues 5 merchant bankers for the issue

Mumbai-based public sector bank Central Bank of India is coming out with an initial public offering of Rs. 1000 crores, expected by end-May 2007. The bank has finalized five merchant bankers for the issue. The bank has appointed IDBI Capital Markets, Kotak Securities, ICICI Securities, Citigroup Global Markets and Enam Financial as the lead managers to the issue.

The bank has received all regulatory clearances for converting about 71% of its large equity base into preference shares. The proposal for conversion of shares, which was stuck at the Reserve Bank of India (RBI), was recently cleared by the government. The bank is negotiating with the government for the coupon rate on the preference shares. The government wants a floating coupon rate of 100 basis points above the RBI’s repo rate, which is currently at 7.75%.

Of the Rs. 1124.14 crores equity capital, Rs. 800 crores would be converted into preference shares. The conversion will lower the bank’s paid-up equity capital to Rs. 324.14 crores. Central Bank, which had planned to get listed in the fourth quarter of 2006-07, as on December 31, 2006, had a total business of Rs. 121,301 crores, comprising deposits of Rs. 74,974 crores and advances of Rs. 46,327 crores.

Read the article in Business Standard.

Ahmedabad-based CRO Synchron acquires local firm Innovance

DNA Money reports that Ahmedabad-based contract research organization (CRO) Synchron Research Services Private Limited has taken over Innovance, a local start-up CRO. The financial details of the transaction, which was facilitated by Deloitte, have not been disclosed. The acquisition is touted as a first-of-its-kind in the Indian CRO space.

Innovance has been co-promoted by Dr. BB Lohray, the former head of research at Zydus Cadila who was in the headlines recently for being fired by the company for alleged embezzlement of funds. The promoters of Innovance wanted to sell off the firm and had approached Synchron 4-5 months ago.

The deal will help Synchron hike its bed capacity to nearly 200 from the 90 and catapult it to the league of Asia’s largest CROs. However, the company is not planning a halt in its inorganic growth strategy anytime soon. It is looking for more acquisitions in India and even in other parts of Asia to increase its Asian footprint, as per company officials.

Q1 2007: M&As – $42 bn; VC / PE – $2.4 bn

The first quarter of Jan-Mar for the calendar year 2007 has seen mergers and acquisitions (M&As) touch a figure of a whopping $42 bn. This has resulted in the M&A / GDP ratio standing at around 18%, against the global average of 8.8%. Out of the total deals announced by India Inc during the quarter, $38.9 bn represent strategic M&As including the big ticket Tata-Corus, Hindalco-Novelis and Vodafone-Hutch deals. In March there were 54 M&A deals announced worth $2.14 bn. The big ones last month were Tata Power’s $1.1 bn deal for a strategic stake in coal assets in Indonesia and Havell’s $300 mn deal to acquire German lighting company SLI Sylvania.

With the spurt in M&A transactions in the Jan-Mar quarter, venture capital (VC) / private equity (PE) investments in India also seem to be riding on a crest. The first quarter of 2007 has seen VC / PE investments almost double to about $2.4 bn across 78 deals compared with $1.4 bn across 69 deals in the same period last year. The figure of $2.4 bn doesn’t include real estate investments made in the first three months of the year. IT, manufacturing, financial services, engineering and construction, transport and logistics are the happening segments, going by investments in these sectors in this quarter. However, there has been a flat growth in VC investments, which accounted for only about $100 mn in Q1 across 15 deals. The figure includes 11 deals in the sub-$10 mn category.

Some of the big deals announced in the first quarter include a combined deal of about $500 mn for stake in National Stock Exchange by New York Stock Exchange, Goldman Sachs, Softbank and General Atlantic; Nimbus Communications received funding of about $125 mn from British PE firm 3i, Cisco Systems and Oman International Fund in January; Khazanah Nasional Berhad, the investment arm of the Malaysian government, hiking its stake in IDFC to 9.95% by paying around Rs. 820 crores in March; Kotak Mahindra Bank’s Private Equity Group investment of Rs. 100 crores in DRS Logistics, a logistics and transportation service provider based out of Hyderabad; ADM, an HK-based fund, invested $82 mn for a 10% stake in SKNL; Ramky Infrastructure, a Hyderabad-based construction company, raised Rs. 125 crores from IL&FS Investment Managers and UAE based Sabre-Abraaj PE Fund.

Read The Economic Times articles – 1 & 2.