Edelweiss to start asset management and NBFC businesses; recruits senior people for the same

Leading domestic investment bank Edelweiss will commence asset management and non-banking financial company (NBFC) businesses by investing a total of Rs. 400 crores in the new ventures. Edelweiss would invest Rs. 300 crores for the NBFC business and another Rs. 100 crores for the asset management business. The NBFC would be looking at mortgage business and other credit instruments. Edelweiss had received in-principal approval from SEBI for the asset management company.

Edelweiss also announced the appointment of senior executives for its new business of NBFC and AMC businesses. R Balakrishnan, who will head the NBFC business, has been appointed executive vice-president of Edelweiss. Mr. Balakrishnan earlier worked as Senior VP & Head of Equity Research at DSP Merrill Lynch. Prior to Edelweiss, he was an independent consultant and part of the senior management team at credit rating agency CRISIL. For the AMC business, Edelweiss appointed Jimmy Patel as the CEO. Patel’s earlier stints include CEO and COO of JM Financial Mutual Fund and with the Principal Group, where he was in-charge of their pension initiative in India. Edelweiss also took on board Peeyoosh Chadda of Barclays as co-head of the AMC business.

Read the Business Standard article.

Air Deccan seeks $75-100 mn private equity; hires Edelweiss for PE syndication

Air Deccan is planning to raise around $75-100 mn for its expansion plans, and has reportedly approached the Reliance ADAG Group and a Delhi-based conglomerate for the same. Investment bank Edelweiss Capital has been mandated by the low-cost airline to help raise private equity. Texas Pacific Group, Carlyle Group, Standard Chartered Private Equity, Macquarie Capital, ChrysCapital, Lehman Brothers, General Atlantic and GIC of Singapore are some of the investment firms that have been sounded out. The process is expected to be completed over the next three months.

Additionally, Air Deccan is also looking to raise money by securitizing its future receivables or by issuing bonds, and is in talks with global players like International Lease and Finance Corporation (ILFC) and GE Commercial Aviation Services (GECAS).

Read the complete article in The Economic Times.

Cinemax India Limited IPO priced at Rs. 135 to Rs. 155

One of India’s leading theatre chains, Cinemax India Limited, is coming out with an Initial Public Offering (IPO) with an issue of 8.92 mn shares of Rs. 10 each at a price band of Rs. 135 – Rs. 155 per share. The issue comprises a fresh issue of 7 mn shares and an offer for sale of 1.92 mn shares by existing shareholders. The net issue will constitute 31.86% of the fully diluted equity share capital of Cinemax India Limited.

The capital raised from the issue will be deployed to set up several theatres in various locations across India. As a part of their expansion plans, over the next two years, they propose to set up 19 theatres at identified key locations in which a total seating capacity of approximately 15,864 seats will be created.

Enam Financial Consultants Private Limited, JM Morgan Stanley Private Limited, Edelweiss Capital Limited and Ambit Corporate Finance Private Limited are the Book Running Lead Managers to the IPO. The shares will be listed on The Bombay Stock Exchange and The National Stock Exchange of India.

Read the press release here.

Foreign investors pick 20% stake in Edelweiss Capital

Mumbai-based investment bank Edelweiss Capital has divested 20% stake to a number of financial investors including the Government of Singapore Investment Corporation (GIC) and the New York-based hedge fund Galleon Partners for around $90 mn.

Edelweiss will announce the deal soon after the Foreign Investment Promotion Board (FIPB) clears the investments.

With this transaction, Edelweiss is valued at around $400-450 million. The investment bank is also considering an initial public offer (IPO) by 2008 to give an exit option to its various investor groups. Prior to deal, employees and promoters of Edelweiss were holding around 74% equity stake, with Greater Pacific Capital (GPC), a London-based strategic investment firm and Americorp Capital jointly holding the remaining 24% stake.

Edelweiss was established in 1996 and now boasts of a team of around 600 people, with services ranging from brokerage to investment banking, asset management and insurance advisory. Edelweiss has been growing at 100% growth rate over the last 3 years. Revenues grew to Rs. 147 crores in 2005-06, from Rs. 73 crores in the previous year, while PAT grew to Rs. 42 crores from Rs. 24 crores.

Read The Economic Times article.

Pantaloon Retail to divest stakes in subsidiary companies

Pantaloon Retail India Limited (PRIL) is planning to dilute stakes in its subsidiary companies for expansion-related purposes. The companies that are lined up are Future Media, Future Capital, Future Logistics and Central and dilution of stakes would either be way of IPOs, preferential allotment or strategic sale.

Future Media targets developing retail space and malls as an outdoor media option. PRIL is in talks with WPP for a strategic partnership in Future Media. Future Logistics deals in supply chain and distribution management. Future Capital is a PRIL subsidiary that focuses on asset management and consumer finance. It manages Horizon and Kshitij, two real estate investment funds and Indivision, a consumer-related private equity fund, and soon plans to get into insurance, consumer credit and other consumer-related financial products and services. Central is a chain of lifestyle retail stores.

Equity analyst Edelweiss Securities estimates that of PRIL’s total requirement of Rs. 4500 crores, equity dilution would get the company Rs. 1000 crores. Quoting the company’s internal projections, the research firm also says that in all Mr. Biyani’s company needs approximately Rs. 2300 crores from external sources of which Rs. 1300 crores will come in the form of debt. Pantaloon’s expansion plans are targeted at taking the group’s total retail space to about 30 mn square feet by the end of 2011 from the current 3.5 mn square feet. By the end of FY10, Mr. Biyani is looking at 80 Pantaloon stores in various parts of the country from the current number of 23. Similar expansion is in the pipeline for Big Bazaar and Food Bazaar, where the company aims to take the number of stores to 225 and 250 respectively, growing from the current 35 and 53 respectively

In October 2006, ICICI Ventures and Kotak SEAF India had picked 15% and 6% stakes respectively in another PRIL subsidiary, Home Solutions Retail, bringing an investment of about Rs. 120 crores.

Read the article in The Economic Times.

OnMobile buys out ITFinity

OnMobile, a provider of ring tones and mobile-commerce services, has made a 100% buyout of ITFinity, reports The Economic Times. ITFinity is a specialist software company. The transaction value is around $15-20 mn.

The investors of ITFinity represent a who’s who of the private equity world. These include Rajat Gupta of McKinsey & Co, Ashish Dhawan of ChrysCapital, Luis Miranda of IDFC, Mumbai-based Edelweiss Capital and Rajesh TS Reddy, former founder of Unimobile.

OnMobile has the backing of IT giant Infosys. In October 2006, Deutsche Bank, Goldman Sachs and Polygon Investment Partners acquired a 10% stake in OnMobile for about $27.8 mn, valuing the company at $270 mn.