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.

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.
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JP Morgan to set up asset reconstruction business in India

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.

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.
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Hershey to buy 51% stake in Godrej Beverages & Foods

Chennai-based Xtenza Solutions to form JV in Malaysia with Petrogold

Chennai-based software company Xtenza Solutions has formed a IT JV with Malaysian trading company Petrogold to tap the growing IT market in Malaysia. Petrogold would hold 51% stake in the joint venture.

Xtenza is a subsidiary of US-based Softnet Solutions, which picked up 50% stake in the company from its promoters who now hold the remaining stake. Softnet is headed by an Indian settled in the US and with about 70 employees, has revenues of about $10 mn. It offers solutions that make an organization’s supply chain more efficient by automating some of its transactions with suppliers, logistics providers, dealers and finance agents. Its major domestic customers include Hindustan Zinc, Sterlite, Eicher and L&T.

The joint venture would be based in Kuala Lumpur and would also target Singapore, Brunei, China and Indonesia, with initial thrust coming from Malaysian companies. The company is set to go on-stream by third week of April.

Read The Economic Times article for more details.

SCA and Godrej Consumer Products form JV for hygiene products in India

Swedish consumer and paper goods company SCA and Indian FMCG major Godrej Consumer Products Limited are forming a 50:50 JV, christened as Godrej SCA Hygiene Limited, for the manufacturing and marketing of absorbent hygiene products such as sanitary napkins and baby diapers, in India, Nepal and Bhutan. The joint venture is being set up with an equity capital of Rs. 20 crores through equal investments by both the companies.

For more details, read the press release here.

ASK calls off JV with Raymond James

The ASK-Raymond James JV is no more. Brothers Asit and Sameer Koticha-owned ASK Investment & Financial Consultants has bought out the 50% strategic stake from Raymond James Financial, Inc. for an undisclosed amount. Raymond James will not have any presence in India post-deal. The Kotichas have kept their options open on having financial partner or strategic investor in the future.

Subsequent to the buyback, the 50% shares will remain with the two brothers-Asit and Sameer. In the new holding pattern, the two brothers will hold 75% shares and another 25% will stay with Bharat Shah, who will be heading the ASK Investment Managers Private Limited. The ASK Group also plans to enter mutual fund, real estate and NBFC businesses.

Read the Business Standard article.

Credit Suisse forms JV with GE for emerging markets infra fund

Zurich-based universal bank Credit Suisse has entered into a joint venture with General Electric (GE) for an infrastructure fund. The fund will invest in emerging markets with a substantial portion devoted for investments in the Indian infrastructure sector. The size of the fund is estimated to be around a $ bn-plus. The fund-raising is currently going on. The announcement of the fund comes in the wake of the resumption of Credit Suisse’s institutional broking business in India, after a gap of six years. Credit Suisse was suspended from trading in India for two years from April 2001 to April 2003 by the Securities and Exchange Board of India (SEBI) for alleged price manipulation.

The bank has roped in the services of V Anantharaman as head of investment banking in India. Mr. Anantharaman was earlier the head of corporate advisory services at Standard Chartered Bank.

Read the Business Standard article.
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SAIL and Jaiprakash Associates in cement production JV

The Steel Authority of India Limited (SAIL) has entered into a 26:74 joint venture with Jaiprakash Associates for producing 2,2 mn tonnes of cement. The venture will spend Rs. 600 crores to set up the new plant. SAIL will hold 26% stake in the venture while the balance will be held by Jaiprakash. The clinker and partial grinding unit of the plant would be located in Satna in Madhya Pradesh and slag cement would be made in Bhilai in Chhattisgarh. The project is expected to be completed in 37 months.

Two unique things about the project are that, firstly, this is the first of its kind public-private partnership in the cement sector. Secondly, SAIL’s foray into cement production is important as cement prices have shot up in wake of demand overshooting supplies. The country’s current cement production capacity is 165 mn tonnes. About 30 mn tonnes of new capacity is expected to be added in a couple of years. SAIL currently sells slag to cement companies through medium-term contracts but the exercise is not enough for a total disposal of its stocks. The JV would enable the company for more productive use of the waste generated by it while producing steel.

The JV would use slag generated from SAIL’s Bhilai Steel Plant as basic feed for cement production, and has already signed a 30-year agreement with the Bhilai Steel Plant for supply of slag. SAIL is also looking at using its slag generated from Bokaro Steel Plant for conversion to cement.

Read The Economic Times article.

Raymond James to buy out Indian partner ASK Investment Financial Consultants from ASK-Raymond James JV

US brokerage Raymond James Financial, Inc. may buy out the stake of its Indian partner, ASK Investment Financial Consultants. Competition in India’s investment banking market has heated up dramatically, and foreign securities houses are now scrapping joint ventures to chase deals by themselves.

Last month, Morgan Stanley said it would spend a net $425 mn to split from its Indian partner, JM Financial. Merrill Lynch agreed to pay $500 mn to lift its stake in its DSP Merrill Lynch joint venture to 90% from 40% in December 2005. Goldman Sachs announced plans last year to set up its own Indian investment banking and securities business after selling its stakes in two joint ventures to partner Kotak Mahindra Bank.

Read The Economic Times article.

Nakheel, DLF form JV for infrastructure development projects worth $12 bn

Delhi-based real estate giant DLF is reportedly forming a joint venture with Nakheel, the largest property development company in the United Arab Emirates. The JV is being formed for mega infrastructure development projects at an estimated cost of $10-12 bn.

Each project, one near the National Capital Region and the other in Maharashtra, along the coastal region, would be spread over 20,000 acres, and would involve the development of industrial infrastructure and township components, including residential, commercial, retail and recreational centres. Each partner would bring around $3 bn to the table while the remaining would be financed through debt.

Nakheel is behind some of the most iconic projects in the Middle East such as The Palm, The Dubai World and Dubai Waterfront. Nakheel currently has 17 major projects, worth more than $30 bn under development.

Read more in The Economic Times article.

Reliance Industries in JV talks with US-based Nova Chemicals

Apart from Dow Chemicals, it is learnt that Reliance Industries is said to be in advanced stage of discussions with North American plastics and petrochemicals major Nova Chemicals as part of its bid to spread wings to foreign shores. The possible alliance could include product swaps, infrastructure sharing as well as joint exploration of business growth opportunities.

Nova Chemicals has a market capitalization of about $2.5 bn, and has seven manufacturing facilities in the US, six in Canada and two others in South America, while it is also present in Europe through various joint ventures. It has an annual turnover of over $6.5 bn.

Read more in the Business Standard article.
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Reliance Industries giving shape to global ambitions; in talks with Carrefour, Dow Chemicals for strategic alliances

Sun Pharma to hive off R&D work into new company SPARC

Sun Pharmaceuticals will spin off its research and development (R&D) activities into a new company called Sun Pharma Advanced Research Company (SPARC). The transfer will include the company’s New Chemical Entity (NCE) and New Drug Delivery System (NDDS) programmes, which have an estimated 100 scientists.

Sun Pharma will infuse $45 mn into the new company, to enable it to sustain its operations until revenues from out-licensing deal start flowing in. The company could be looking at raising funds for its new company through equity or debt. It is planning to invest $60 to $65 mn in the new research company in the next three years. Research for generic drugs will remain with the main company.

The de-merger will offer investors an option to separately hold investments in businesses with different return characteristics, depending on their risk and return expectations. The new research company, SPARC, is being valued at more than $450 mn. Simultaneously, the de-merger of Sun Pharma’s innovative R&D business could significantly de-risk the company’s core business.

Read the article in The Economic Times.

German shipping major inks JV with Shipping Corporation of India

The Times of India reports that German shipping company Peter Dohle Schiffahrts KG, one of the largest privately held shipping company in the world has entered into a JV with India’s largest shipping company, the Shipping Corporation of India (SCI). The 50:50 JV mainly entails jointly operating bulk carriers and container ships. The venture is likely to be kicked-off shortly with the formation of a company either in India or overseas. Initially, both companies plan to deploy bulk carriers in the joint venture company. A little later, the fleet will be expanded to more bulk carriers or container ships, depending on market conditions.

Sical Logistics to receive Rs. 110 crores private equity from IDFC; to hive off non-core activities

Sical Logistics Limited will receive private equity funding of around Rs. 110 crores from IDFC Private Equity from its IDFC Private Equity Fund II. The proposed investment would be through a preferential issue of equity shares. SSKI Corporate Finance was the advisor to Sical for the fund raising exercise.

Sical intends to become a pure play integrated logistics provider. It is now in the final stages of divesting its non-logistics businesses. As part of this process, Sical proposes to de-merge the non-logistics businesses comprising of trading undertakings, services undertaking and coffee plantations as per the de-merger scheme approved by the board. The ratio for issue of shares upon de-merger has been endorsed by Ernst & Young. Additionally, Sical is also hiving off some of the other non-core businesses including palm oil, refractory, auto, drums, agri-bio products, specialty chemicals and flexible shafts. Buyers have been identified and relevant due diligence exercises are currently in the last stages. It is expected that a significant portion of the hive off exercise will be completed within FY 2007.

Read more on Sical Logistics in Moneycontrol.com.

Reliance Industries giving shape to global ambitions; in talks with Carrefour, Dow Chemicals for strategic alliances

Reliance Industries is reportedly in talks with French retail major Carrefour as well as other global players for acquiring controlling stake in these companies to reach out to international consumers with its basket of Indian food produce.

Reliance has created a war-chest of Rs. 100,000 crores and is looking to create international business arms for accessing global markets by leveraging on its supply chain that was put in place as part of the farm-to-fork project. Besides Carrefour, Reliance is also talking to Tier-2 companies like Salisbury and Marks and Spencer for food business.

Carrefour on its part has denied any sort of discussions with Reliance for either a controlling stake in the former or a joint venture. In a related development, Reliance is also in talks with Dow Chemicals and is expected to form a petrochemical JV.

Consulting firm Tholons partners US-based Baird Private Equity

Business Standard reports that investment, advisory and consulting firm Tholons has partnered Baird Private Equity, a global private equity group of investment firm, Robert W Baird & Company. The partnership allows Tholons to expand its footprints in the globalization of services consulting space by helping Baird Private Equity’s portfolio companies leverage the benefits of global outsourcing. The partnership will enable Baird to establish its presence in the fast-growing offshore markets. Tholons will have dedicated resources for Baird to be located at its Bangalore centre. They will work exclusively with Baird Private Equity’s portfolio companies, particularly those in the business services sector, to evaluate, develop and execute appropriate strategies in India. Several of Baird’s portfolio companies including HireRight, TrueAdvantage and Cerillion have a presence in India and stand to benefit from Baird’s presence there.

Domestic investment bank Allegro ties up with UK-based Close Brothers for cross-border opportunities

While the JM Financial-Morgan Stanley JV unravels, another one seems to be in the making. Allegro Capital Advisors, a domestic investment bank with a pan-India presence has tied up with UK-based investment banking firm Close Brothers for cross-border investment banking partnerships in South East Asia.

The alliance would enable Allegro to offer international investment banking services and deliver a global platform of M&A opportunities to Indian businesses. The firm claims to be already sitting on a number of cross border acquisition mandates from Indian corporates.

Close Brothers focus on the mid-market corporate segment. It is UK’s largest listed investment bank with a network of 450 investment banking professionals across 36 offices located in 20 countries.

Read The Economic Times article.

Uttam Galva ties up with UK-based Liberty Commodities for Ghana steel plant JV

Uttam Galva Steels Limited, one of India’s leading galvanized steel producers, will invest up to Rs. 450 crores to set up a galvanizing and cold-roll mill complex in Ghana in a joint venture along with Liberty Commodities, a UK-based trading major with interests in metals and oil. The JV firm, Ghana Iron & Steel, will initially invest about Rs. 270 crores. Uttam Galva will have a majority stake in the JV. The joint venture company is believed to have already acquired land for the project.

The complex will include a hot-dip galvanizing line with a capacity of 75,000-tonne-per-annum that will be functional in 18 months. Later, a 250,000 TPA cold mill will be set up to feed the galvanizing unit. Till then, cold rolled coils will be exported from India and Bangladesh. The initial investment of Rs. 270 crores will be made for the two units.

Read The Economic Times article.

Bangalore-based Teleradiology forms JV with NHG Singapore

Bangalore-based teleradiology services company Teleradiology Solutions has entered a joint venture (JV) with the Singapore-based National Healthcare Group (NHG).

The joint venture company is called Tele Rad, Singapore. It will be based in Singapore and will operate in Asia initially and later spread to other markets. Both companies will invest Singapore $100,000 each. Tele Rad will market the products globally and source work to India. At present, NHG Singapore has nine polyclinics, four hospitals, one national centre and three specialty institutes. Singapore has a Free Trade Agreement (FTA) with the US, and handles hospital needs of the US servicemen both retired and those who are posted in Asia.

For the last three years, Teleradiology Solutions has been servicing NHG Singapore, through a service contract. As part of the contract, 45% of all primary healthcare records totaling 35,000 radiology scans are sent to Bangalore for reading.

For the uninitiated, teleradiology is the remote interpretation of all non-invasive imaging studies such as CT, MRI, ultrasound medicine studies and digitized X-rays.

Read the Business Standard article.

Reliance Industries to form separate holding company for offshore oil assets

Reliance Industries Limited will transfer all its overseas oil assets to a new company to be called as Reliance Exploration and Production DMCC, to be headquartered in Dubai. The subsidiary will first take over the assets Reliance has secured in the West Asian countries. Modeled on ONGC’s ONGC Videsh, the investment arm for ONGC’s overseas oil assets, the new Reliance subsidiary will be the holding company for all overseas upstream assets in oil and gas. This restructuring is being done to reduce the risks on Reliance’s balance sheet as many of these oil assets are in politically risk-prone areas.

Reliance earlier had confined itself mainly to exploration and production within India, but has now taken up overseas expansion in a major way. Armed with its success in the Krishna Godavari deep waters (KG basin), the company has been looking at opportunities in oil-rich nations including Russia and Central Asian countries. The political risks in these countries are huge and exposing Reliance to such uncertainties could impact valuations. The subsidiary was floated in the third quarter of 2006-07.

Reliance has interests in exploration of overseas blocks in Yemen and Oman. It has already made oil discoveries in the onshore Malik 9 block in Yemen. The development plan for the block has been approved by the Republic of Yemen and test production commenced in December 2005. In the Oman offshore block, where RIL is the operator, the existing seismic data has been collected and 2D reprocessing of data is underway.

Read The Economic Times article.

Raksha TPA and UAE-based business group form healthcare JV

Haryana-based Raksha TPA, India’s third-largest health insurance claims administrator, has set up a joint venture with UAE-based industrial conglomerate Rais Hassan Sadi in Dubai. Rais Hasan Sadi is a 92-year old business group with interests ranging from shipping to real estate. The JV, to be called as RHS-Raksha TPA, with Raksha holding 49% and RHS holding the balance, will seek to direct patients needing tertiary healthcare to hospitals in India. Tertiary healthcare is specialized medical services that include cancer care, neurosurgery and burns care.

Initially, RHS-Raksha will empanel hospitals in Abu Dhabi and Sharjah and later Oman for cashless treatment of health insurance policyholders. For tertiary care cases, the JV will consider sending patients to Raksha’s network of hospitals in India.

Ritu Nanda, chairperson and CEO of RNIS College of Insurance, and Rajan Nanda of Escorts together hold 60% stake in Raksha TPA and the other 40% is held by Naresh Trehan, executive director of Escorts Heart Institute.

Read the Business Standard article.

Sherwin Williams pursuing business options with Nitco Paints

US-based paints company Sherwin Williams is believed to be in advanced stages of talks with Nitco Paints, an associate company of Mumbai-based Nitco Tiles, for a possible business tie-up. Nitco Tiles is engaged in the building business. Sherwin Williams is pursuing various options like joint venture, buyout and a joint holding company.

Sherwin Williams is the second-largest paint company in the world. Its entry in India is expected to change the dynamics of the colour space in the country, which is currently dominated by biggies like Asian Paints, Berger, Kansai Nerolac, ICI Paints and Shalimar. The paints segment in India is growing at an average 15%.

Read the article in DNA Money.

In a related development, Nitco Tiles Ltd also plans to spend $25-30 mn to acquire stake in a Chinese tile manufacturer within the next two months. Nitco will use the capacity in China to cut costs and to export tiles to other countries directly. The acquisition will be financed out of a proposed Rs. 250 crore-issue of securities to overseas investors or to qualified institutional buyers. The company has already obtained shareholder approval for the issue.

Read more on this in The Economic Times.

Mastek ends IT services JV with Deloitte Consulting

Mid-sized information technology vendor Mastek Limited is selling out its joint venture with Deloitte Consulting. Mastek had established a 50:50 IT services JV with UK’s Deloitte Consulting in 2001 to offer services like application development, systems implementation and integration and other outsourcing services.

As Deloitte shifted its focus to consulting from IT services, revenues stagnated around the Rs. 100 crore-level for the past three years. Margins, at around 4%, are also significantly lower than Mastek’s own. The company has refused to disclose the valuation of the JV. The viability of the JV was also a question since Deloitte has set up its own centre in the country.

In the last quarter, Mastek had bought out its business process outsourcing JV partner Carreker in their loss making non-voice BPO JV. Last year, Mastek sold its stake in another BPO venture in favour of partner Capita to remain a minority financial investor.

Read more on Mastek in the DNA Money article.

Carrefour said to be in talks with HDFC Group for Indian retail venture

Carrefour is reportedly partnering with the HDFC Group for it Indian retail operations. The actual entity could be a private equity arm.

In a somewhat complicated yet a highly complicated structure, HDFC could float a separate holding company, most likely a PE fund, which would, in turn, tie up with a third entity for getting Carrefour’s franchising rights for India. Meanwhile, it is understood that Carrefour will completely retain the back-end wholesale operations, as 100% FDI is allowed in cash-and-carry segment. Even though Carrefour cannot invest in the equity of the retailing business, it will get its own people to spearhead the venture. Details of the exact arrangement and modalities that the two companies are looking at could not be found. Both Carrefour and HDFC have declined to comment on the issue.

It is to be noted that Carrefour cannot do business in India in general retail on its own as foreign direct investment is not allowed in the sector. At the same time, RBI regulations prohibit HDFC or HDFC Bank from getting into retailing.

Carrefour has particularly evinced interest in HDFC because of obvious real estate considerations. For retailers like Carrefour, who generate most of their business from large format hypermarkets, getting viable real estate is the prime concern. HDFC, on its part, has a separate realty fund, which has access to a huge land bank in various parts of the country. In addition, this fund has an equity stake in some large scale projects of prominent real estate developers, such as Ansal API, Pune based realtor Vascom Engineers and L&T Urban Infrastructure. The holding company could leverage its relationship with these developers in getting access to prime real estate for the retail business.

Read The Economic Times article.

DLF forms life insurance JV with Prudential Financial

A day after HSBC, Canara Bank and Oriental Bank of Commerce announced their three-way life insurance tie-up, real estate giant DLF has joined hands with US-based financial player Prudential Financial, Inc. (PFI) for a foray in life insurance business. The two partners will invest about $250 mn (Rs. 1000 crores) over the next ten years in the venture. Under the terms of agreement, Prudential will have 26% stake and the remaining 74% will be held by DLF Group in the JV. The joint venture has been christened as DLF Pramerica Life Insurance Company Limited. Pramerica is a brand name used in select countries by Prudential Financial. The company will initially have a paid-up capital of Rs. 100 crores, including Rs. 26 crores by Prudential. Both the partners would have representatives on the Board, while Prudential would take care of the operations. The company would be based in New Delhi

The company is applying for a license from the Insurance Regulatory and Development Authority (IRDA), and hopes to start operations by early 2008. Prudential is in talks with several banks and non-banking finance companies (NBFCs) to distribute its insurance products, apart from having its own distribution products.

Prudential Financial has about $616 bn of assets under management by December-end 2006 and operates in the US, Japan, Mexico as well as in many countries of Asia and Latin America.

Read articles in The Economic Times and Business Standard.

HSBC forms life insurance JV with Canara Bank and Oriental Bank of Commerce

British banking giant HSBC has formed a life insurance JV with Bangalore-based Canara Bank and New Delhi-based Oriental Bank of Commerce.

Canara Bank will hold 51% stake in the venture with HSBC taking 26% and Oriental Bank of Commerce settling with 23%. The business has been capitalized with a corpus of Rs. 2 bn ($44.97 mn).

HSBC joins a league of global firms such as New York Life, Prudential and Allianz in setting up an insurance venture in India which has a population of 1.1 bn people, and an insurance market that has doubled to more than $20 bn dollars in annual premiums since it was thrown open to foreign investment in 2000.

Read The Economic Times article.

ICICI Bank to transfer stake in insurance and AMC businesses to new company ICICI Holdings

ICICI Bank will transfer its holdings in its insurance and asset management businesses to a new holding company called ICICI Holdings. The bank would transfer to ICICI Holdings its 74% equity holdings in ICICI Prudential Life Insurance Company and ICICI Lombard General Insurance Company and 51% in Prudential ICICI Asset Management Company and Prudential ICICI Trust to the new entity.

The book value of ICICI Bank’s investment in ICICI Prudential Life is Rs. 1300 crores, ICICI Lombard General Insurance Rs. 600 crores and in ICICI Prudential Asset Management Company and the trustee company is about Rs 50 crores.

The decision to move these assets to the new company was prompted by the Reserve Bank of India (RBI) regulation that banks can invest a maximum of 20% of their net worth in subsidiary companies.

The bank has applied for approvals from the RBI and the Insurance Regulatory and Development Authority (IRDA) for transferring its stake in the insurance and mutual fund ventures.

ICICI Holdings may consider a public listing of its equity shares at an appropriate time to meet a part of the further capital requirements of ICICI Life and ICICI General. ICICI Bank intends to retain majority ownership in ICICI Holdings.

Read the Business Standard and The Economic Times articles.

Amalgamated Bean Coffee Trading to spin off coffee chain Cafe Coffee Day into a separate company

Amalgamated Bean Coffee Trading Company Limited (ABCTCL) is planning to spin off its coffee chain Cafe Coffee Day into a separate entity. The motive behind such a move would be to list Cafe Coffee Day in the next three years. It is expected that the coffee bar business will have a turnover of a little over Rs. 800 crores by 2010 from the current Rs. 380 crores. It had recently raised close to Rs. 160 crores through a mix of debt and equity from Sequoia Capital and International Finance Corporation.

Cafe Coffee Day has its business spanning the entire value chain of coffee consumption in India. Its different divisions include Coffee Day Fresh ‘n’ Ground (which owns 386 coffee bean and powder retail outlets), Coffee Day Xpress (which owns 500 Coffee Day kiosks), Coffee Day take-away (which owns 7000 vending machines), Coffee Day Exports and Coffee Day Perfect (FMCG packaged coffee) division.

ABCTCL in its roadmap has stated it aims to double the number of coffee bars to 800 in three years, while the coffee powder vending stores will number up to 650 from the current close to 400. The Xpress brand on the other hand will be paced up to 2500 outlets from the current 500 in three years’ time frame. Cafe Coffee Day is present in 70 cities across India, and is branching out to foreign shores by setting up cafes in Vienna, Austria and is planning to set shops in West Asia, Eastern Europe, Eurasia, Egypt and South East Asia in the coming months, besides in Pakistan and the US.

Read the Business Standard article.

Mahindra and Mahindra, Renault and Nissan form Rs. 4000 crore-joint venture in Tamil Nadu

Auto and auto components major Mahindra and Mahindra (M&M) has formed a tripartite joint venture with global auto giants, France’s Renault and Nissan from Japan, to set up a Rs. 4000 crore-greenfield automobile plant at Oragadam, near Chennai in Tamil Nadu. The facility will have a capacity to manufacture 400,000 units by 2009 and would be used by all the three auto majors for production of vehicles from their respective stables. M&M will hold 50% stake in the new venture, while the rest will be jointly head by Renault and Nissan of Japan. The Tamil Nadu government would provide land and incentives for the project. M&M President, automotive sector, Pawan Goenka was named the chairman of the JV company.

The Tamil Nadu government has already had some land and would acquire more to meet the needs of the facility, which would come up on a 925-acre plot. The new facility would see to it that those displaced due to acquisition of land for the project would be relocated at a place convenient to them. The new company would also start vocational schools in the area to train students and absorb them in the facility.

The project would consist of integrated automobile manufacturing facilities which would include engine plant, transmission plant, press shop, body shop, paint shop and assembly line, an official press release here said, adding this would be India’s biggest vehicle manufacturing centre at a single location. It would involve manufacture of 50,000 tractors per annum and there would be a Mahindra Research Valley in the Mahindra World City near Chennai.

The project would result in gross value addition of about Rs. 18,000 crores per annum to Tamil Nadu’s GDP and the additional investment in the State by vendors and supporting service providers was expected to be about Rs. 10,000 crores. The new facility would provide direct employment to 5000 people and indirect employment to many more.

M&M and Renault already have an existing JV which is manufacturing the Logan brand of cars.

Read the articles in The Economic Times and Business Standard.

Shoppers’ Stop, Nuance form airport retail JV

Shoppers’ Stop and Nuance Group AG have formed a joint venture to bid for contracts to set up duty-free retail outlets in Indian airports. The JV is among the five short-listed bidders for a contract to set up duty-free retail outlets at Mumbai international airport. In the airport retailing space India, with a projected annual passenger growth of 10.4%, is considered a strong growth potential market. Nuance with an annual turnover of $1.7 bin has a presence in 17 countries with 340 shops across 57 airports operating in duty-free core categories like cosmetics, liquor, chocolates and specialty stores like food and beverage outlets.

Read the Business Standard article.

Kotak AMC ties up with US-based T Rowe Price

Kotak Asset Management Company has tied up with the US-based T Rowe Price to launch a fund that will invest in the Luxembourg-domiciled T Rowe Price Funds Sicav-Global Emerging Markets Equity Fund.

Baltimore-based T Rowe Price is one of the world’s leading independent investment management firms. The fund is expected to be launched in the next couple of months. The tie-up with T Rowe encompasses only product initiatives.

The size of the fund can be up to $150 mn. The fund will aim to outperform the MSCI Emerging Markets Index over the medium-to-long-term by investing in T Rowe Price fund. The fund invests primarily in a widely-diversified, global portfolio of transferable equity and equity-related securities of companies established or conducting a significant proportion of their business activities in the emerging countries of Latin America, Asia, Europe, Africa and the Middle-East.

Read the article in Business Standard.

Changi Airport forms airport modernization JV with Tata Realty & Infrastructure

Singapore’s Changi Airport International (CAI) is entering into a joint venture company with Tata Realty & Infrastructure, a subsidiary of the Tata group, to pursue airport modernization projects in India. The two partners have signed a memorandum of understanding (MoU) to set a joint venture company in which Tata Realty will hold a majority 51% stake and CAI 49%, to invest in, develop and manage Indian airports.

The scope of the venture could include bidding for the impending modernization and operations of the Chennai and Kolkata airports, India’s third and fifth busiest airports respectively, which the government wants to develop as alternative hubs to Mumbai and Delhi. The venture could also extend to investments in some of the 35 smaller airports, as well as the proposed Rs. 4235 crore-Navi Mumbai airport project. Regarding Chennai and Kolkata airports, the government is expected to make a formal announcement of a privatization programme. Chennai handled 6.77 mn passengers and Kolkata 4.4 mn in 2006. The Navi Mumbai airport is expected to absorb 10 mn passengers a year in 2013, its first year of operation, and 40 mn passengers a year by 2030.

CAI is wholly owned by the Civil Aviation Authority of Singapore. It had earlier teamed up with telecom giant Bharti for the Mumbai airport modernization project but later pulled out citing lack of confidence in meeting tender conditions. Besides the Tata group, CAI is exploring the option of teaming up with hotel major Leela Group to develop Kannur airport in north Kerala. Though it had withdrawn from the Mumbai airport project, CAI has teamed up with GVK Group, the present developers of the Mumbai airport, to implement a 100-day improvement programme and assist them in reviewing their master plan.

Read the Business Standard article.
Related Post: Tata Group forms Tata Realty & Infrastructure with Rs. 4500 crore-fund

Shell buys out BPCL’s 49% stake in Bharat Shell

Shell Overseas Investments has bought out Bharat Petroleum Corporation Limited’s (BPCL) 49% stake in Bharat Shell. Both companies want to focus on their own specific lubricants brands in the growing lubricants market in India. The financial details of the deal have not been disclosed. Bharat Shell was a 51:49 JV between BPCL and Shell Overseas and was incorporated in 1993 for marketing Shell’s lubricants in the country. The joint venture has an authorized capital of Rs. 250 crores and a paid-up capital of Rs. 200 crores. Bharat Shell also markets LPG to both domestic and industrial consumers.

Read more in the Business Standard article.

Bank of India forms life insurance JV with Dai-Ichi Mutual Life Insurance and Union Bank

Bank of India has formed a life insurance JV with Japanese company Dai-Ichi Mutual Life Insurance Company and Union Bank of India. Bank of India will hold a 51% stake in the JV, while 26% will be held by Dai-Ichi and 23% by Union Bank of India. The bank is also contemplating a joint venture in Zambia soon. It has also entered into a strategic alliance with Union Bank of India and IDFC for loan syndication, international business, cash management, cheque collection and training.

Article in The Economic Times.

Pradip Overseas to form JV with US textile firm; hit capital markets with Rs. 200 crore-issue

Ahmedabad-based Pradip Overseas Limited, a manufacturer of household linens, is forming a JV with a US-based textile company for branding and marketing its home linen in the overseas markets. The size of the JV is around Rs. 200 crores and will be finalized by Pradip next month by signing a Memorandum of Understanding with the US company. The name of the American company has not been disclosed.

Pradip Overseas is also planning a domestic JV with at least two Mumbai-based companies. The companies would look after the branding and marketing activities of Pradip in the domestic market. The domestic JVs will also be worth Rs. 200 crores.

Pradip Overseas is planning to raise funds for its Green Field Textile Park in Ahmedabad in the debt-equity ratio of 60:40. Of the equity, 20% would be raised from the capital markets for which it plans to come out with a public issue of Rs. 200 crores in the next six months. As of December 2006, the turnover of the company was Rs. 280 crores.

Read the Business Standard article.

Essar Steel to invest $527 mn in steel plant JV with Vietnamese PSUs

The Times of India reports that Essar Steel is forming a JV with two government-run Vietnamese companies for setting up a 2 mn tonne-steel plant in southern Vietnam at a cost of $527 mn (about Rs. 2371.5 crores). The company, through its Singapore subsidiary Essar Steel Vietnam Holdings Private Limited (ESVHL), has signed an agreement with Vietnam Steel Corporation (VSC) and Vietnam General Rubber Corporation (GERUCO) to set up the plant in the Phu My Industrial Zone in southern Vietnam. The project is expected to be completed in 30 months. ESVHL would hold 65%stake, while VSC and GERUCO would hold 20% and 15% equity. Vietnam’s steel consumption is expected to rise from 6 mn tonnes at present to 10 mn tonnes by 2012.

The Tata Group may hive off water business

The Tata Group may spin off its bottled water business into a separate company. The group’s bottled water business currently includes a 30% stake in US’ third largest bottled water company Energy Brands, Inc. (Glaceau). The group is also believed to be in talks to acquire Dadi Balsara’s Himalayan water brand. Energy Brands is an associate company of the group. Tata Tea holds a 25% stake in it, while the remaining 5% is held by a subsidiary of Tata Sons, the Tata Group’s holding company. The ideal combination is to develop a complete spread of offerings, from tea and coffee to water, under a single company, to cover the entire spectrum of beverage consumption.

Article in Business Standard.

L&T, EADS form JV to tap aerospace & defence markets

Larsen & Toubro (L&T) and European aerospace and defence group EADS have formed a JV for joint exploration of business opportunities in defence and aerospace.L&T and EADS have signed a Memorandum of Understanding (MoU) to establish a “long-term, profitable and stable relationship” to better address the needs of the aerospace and defence markets in India and around the world. The signing took place at the Aero India 2007 exhibition in Bangalore.

Read the Business Standard article.

AFL, Dachser form cargo services JV

Air Freight Limited (AFL), the logistics and express service provider, has hived off its cargo arm into a JV with Dachser, a leading logistics major. Dachser is a German logistics company with a turnover of €2.8 bn in 2005 and operates in the air, sea and food logistics segment. Both partners have a 50% stake each in the new entity christened as AFL Dachser. However, the actual size of the JV and investments put in by both players have not been disclosed as both are family-owned businesses.

Read The Economic Times article.

Avendus Advisors ties up with leading European i-bank goetzpartners

One of the fastest-growing domestic investment banks in India, Avendus Advisors, has entered into a JV with goetzpartners, a leading European corporate finance advisory and management consulting firm. The JV will assist Indian companies for M&A opportunities in Europe.

Avendus is ranked in the top tier of investment banks for M&As, is steadily increasing its share in the M&A business emerging out of India. It has also opened its IPO and corporate debt services divisions in order to provide a one-stop solution to its client’s investment banking needs.

The partnership with goetzpartners will enable Avendus to grow its business faster in countries like Germany, UK, France, Spain and Central and Eastern Europe. The JV would focus on high-growth verticals such as IT & ITES, pharmaceuticals and healthcare, media, automotive and knowledge manufacturing. The deal will help Indian companies wanting to expand in Europe and for European companies wanting to set up a beachhead in India.

Read the complete article in DNA Money.

UTV, Future Group in talks for retail JV

Entertainment and media company UTV Software Communications and Future Group (Pantaloon Retail) are in talks to float a retail venture together. The blueprint for the project is to open Cafe Lounges as a brand extension to UTV’s upcoming youth centric channel in June. The Cafe Lounges targeted at the youth will be a fusion of entertainment, gaming and a lounge where youngsters can relax. While UTV will use its strength in the entertainment and broadcasting space, the Future group will use its expertise in the retail domain to jump start this venture.

The Cafe Lounges will be a brand extension of UTV’s youth centric initiatives and will use these to attract the youth both in terms of footfalls to these outlets as well as to ensure eyeballs on the channel. Work on this front has already begun, and placement agency sources also confirmed that UTV has started recruiting people from the retail and cafe space. The retail outlets planned would act as entertainment zones encompassing all the youth initiatives including the channel. Twenty two cities have been identified, and currently locations for the outlets are being tied up. The partnership between UTV and the Future Group would either be a lease and profit sharing model or a joint venture company, still being discussed by both parties.

Read The Economic Times article.

Indiabulls to reorganize businesses; may hive off broking biz into a separate entity

Indiabulls Financial Services is reorganizing its businesses. This will include the de-merger of its brokerage services known as Indiabulls Securities. The Indiabulls board has considered the proposal involving the de-merger of Indiabulls Securities on a going-concern basis and plans to list the resultant entity after the de-merger. Indiabulls also proposed the amalgamation of the entire business and undertaking of Indiabulls Credit Services with the company. Indiabulls has recently been in the news due to the IPO of its arm Dev Developers on the London Stock Exchange’s Alternative Investment Market (AIM) (See Related Post) and the hike in the stake held by steel magnate LN Mittal in the company.

Read the complete article in Business Standard.

Videocon forms telecom JV with US firm Verizon

Consumer durables major Videocon’s Leo Communications is forming a JV with $88 bn US telecom giant Verizon to offer international long distance (ILD) services in India. The initial investment in the venture is estimated to be over $30 mn. Verizon will hold 74% in the JV, while the rest will be held by Videocon. Videocon is likely to be more of a financial partner in the JV and would eventually sell out in the long run.

India is a lucrative market for telecom companies and tele-density is just around 16%. The wireless business is growing very fast and the number of people calling overseas from India is rising fast every year. The annual ILD outgoing minutes from India were 2500 mn in 2005-06 and are expected to rise to 3500 mn by March 2007.

Read more on this in The Economic Times.

Tata Chemicals, Total Produce enter fresh produce distribution JV

Business Standard reports that Tata Chemicals and Europe’s largest fresh produce firm Total Produce Plc have entered into a 50:50 JV to set up distribution facilities for fresh fruits and vegetables across in India. The venture will initially establish facilities in North and East India at a cost of Rs. 26 crores. It would leverage the company’s association with farmers through 500 Tata Kisan Sansar agri-services centres.

UK’s Centric, Fox Mandal and the Hinduja Group to float LPO JV

UK-based contact centre Centric has entered in to an alliance with the Hinduja Group and leading Indian law firm Fox Mandal Little to set up one of India’s largest legal process outsourcing (LPO) firms. The three-way JV, to be called Centric LPO, is likely to employ over 1000 lawyers initially and aims to make India an outsourcing hub for international legal practices. It will be 40% owned by the UK-based outsourcing major and 60% by the JV between Hinduja TMT Technologies and Fox Mandal, with Hinduja TMT holding the majority stake. Hinduja TMT had recently completed the acquisition of US-based BPO Affina. The Hinduja TMT-Fox Mandal JV will have four members on the LPO board while Centric will have two. Centric will use its existing customer base in these markets to woo clients for the new business. Similarly, Fox Mandal will provide the legal expertise while the Hindujas the process skills. The JV will become operational in the next two months and that Centric had already lined up business from UK and US clients. The LPO will focus on every legal aspect-from the low-end secretarial works to law firm accounting and high-end legal work. In two years, it will ramp up to 2000 people.

The LPO segment is poised to cross $6 bn by 2010 and $15-$20 bn by 2015. LPO customers include legal departments of multinationals, international law, legal publishing and legal research enterprises. As of now, it accounts for less than 11% of the $6.3-billion ITeS-BPO pie. Other prominent players in the Indian LPO space include Pangea3, OfficeTiger and Integreon, which is also a BPO player, and law firms such as AZB & Partners.

Read the article in The Economic Times.

Sasken Technologies, Tata company form auto electronics JV

The Economic Times reports that Tata AutoComp Systems Limited (TACO), a Tata Group company, and Bangalore-based embedded communications solutions firm Sasken Communication Technologies Limited has announced a JV partnership to design, develop and market automotive electronics products for the global market. The JV, TACO Sasken Automotive Electronics Private Limited, would address both OEMs and aftermarket It will initially focus on automotive electronics products in the areas of telematics, infotainment and occupant convenience. The company will start its operations from a state-of-the-art product development centre in Bangalore.

Pantaloon office stationery arm Future Office and US-based Staples sign stationery JV

Pantaloon Retail India has announced a joint venture between US-based Staples, Inc. and its new office products business unit, Future Office. The JV firm will serve businesses of all sizes through delivery as well as cash-and-carry locations, offering a wide range of office products from core office supplies to printers to computers.

The agreement establishes a platform for Staples to enter the $10 bn office products market in India and allows Pantaloon Retail to benefit from the industry expertise and sourcing network of the world’s largest office products company.

Read the Business Standard article for the comments of Ron Sargent, chairman & CEO, Staples and Kishore Biyani, MD & CEO, Pantaloon Retail India.

L&T forms JV with Saudi company

Engineering and construction major Larsen & Toubro (L&T) Limited has entered into a joint venture (JV) with AA Turki Contracting & Trading Corporation (ATCO), a leading conglomerate in Saudi Arabia, for construction in the hydrocarbon and power sectors. The new venture would be known as Larsen & Toubro ATCO (Saudia) LLC, and would be registered as a local company in Saudi Arabia. Financial details were not disclosed.

Read more in The Economic Times.

AV Birla Group to split Madura Garments two-way

Madura Garments, India’s largest branded apparel business, will be split into two separate companies by its owner, the AV Birla Group (AVB). AVB would carve out separate entities for lifestyle and mass brands out of the unlisted company.

The group will unveil MG Lifestyle Brands & Retail Business, a new fashion brands company operating with key brands such as Louis Philippe, Allen Solly and Van Heusen, besides lifestyle retail formats such as Planet Fashion and Trouser Town. SF Jeans, Madura’s denim brand, and the international licensed brand Esprit will also be part of the new entity. MG Popular Brands & Retail Business would operate in the mid-priced-to-mass category with brands like Peter England. Both the new entities will be divisions of AV Birla Nuvo.

Madura Garments is expected to report revenues of round Rs. 600-650 crores in FY 2007, and is currently the leader in the domestic apparel space with annualized growth of 20% in recent years. AVB acquired Madura Garments from UK’s Coats for Rs. 236 crores in 1999. The fashion brands company, which will also include Allen Solly Womenswear and Van Heusen Womenswear, is likely to report a topline of Rs. 450-480 crores, while the standalone Peter England is likely to show up with a Rs. 180 crore-turnover in FY 2007.

Read The Economic Times article.