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.

HCL Technologies may bid for Cambridge Solutions

One of India’s premier IT companies, the $1.1 bn-HCL Technologies may bid for Cambridge Solutions, one of the top BPO outfits of the country, valued at around $350 mn. If the deal sails through, it may be the biggest M&A ever in the Indian IT space.

HCL has signaled early interest to acquire around 42% promoter holding put up for sale. The promoters of Cambridge have mandated Lehman Brothers to scout for potential suitors. The promoters of Cambridge, which includes names like ex-McKinsey chief Rajat Gupta, the US-Canadian Bronfman family of Seagram fame, serial investor Ramesh Vangal and former PepsiCo chairman Chris Sinclair, together hold 59.15% stake. It is learnt that Mr. Vangal, who is the single largest individual investor with around 18% stake, is unlikely to offer his shares.

Almost two-thirds of Cambridge’s revenues 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. HCL has BPO operations at nine centres in India, two in the UK and one in Malaysia, which provide both voice and non-voice services. The BPO operations constitute around 17% of revenues and employ around 10,000 people.

Read the article in The Economic Times.
Related Post:
Scandent to sell stake in Cambridge Solutions; Apollo, Fidelity, EDS approached

Deutsche names Sanjay Sharma head of India equity capital markets

Investment banking in India is bearing witness to many high-profile people movements of late. After Citigroup’s investment banking head Surojit Shome’s move to Lehman Brothers India, we now hear of Merrill Lynch old hand Sanjay Sharma quitting Merrill to lead Deutsche Bank’s Indian equity capital markets operations. Sharma’s vacancy is being filled by Sumeet Puri, who will be moving from his post as Asian equity syndicate head from Hong Kong (See Related Post).

Indian equity capital markets volume jumped 22% to more than $19 bn last year, as total investment banking revenue hit a record $413 mn. Indian stocks rose more than 45% in 2006. Deutsche ranked second in investment banking revenues behind Citigroup, with $42 mn in revenues from underwriting stock and bond deals and advising on mergers.

Investment banks like Lehman Brothers, Goldman Sachs and UBS are expanding their
India teams as the country’s companies become bigger global players. Lehman last month poached Citigroup’s Surojit Shome as head of investment banking for India. Bankers, particularly non-resident Indians, are keen to move to Mumbai and New Delhi as top salaries approach the same levels as those in Singapore and Hong Kong, and the market yields increasingly large and interesting transactions. However, intense competition between banks has taken a bite out of fees, with equity deals only paying an average of 1.6%, compared with 2.3% for Hong Kong offerings and up to 7% for initial public offerings in the United States.

Read the article in Reuters.com.

Scandent to sell stake in Cambridge Solutions; Apollo, Fidelity, EDS approached

The Economic Times reports that the Scandent Group is selling its majority stake in Cambridge Solutions. Investment bank Lehman Brothers is scouting for buyers for Cambridge which has a large BPO operation in the US. Some US-based funds such as Apollo, Fidelity and strategic players like global IT major EDS have been approached. An information memorandum has also been drafted for the prospective buyers. Cambridge is expected to fetch a valuation of anything above $300 mn, making it the second largest domestic deal in the BPO industry, after the $500 mn sale by General Electric of its 60 % stake in India’s biggest BPO outfit Genpact to Oak Hill Partners and General Atlantic in 2004. At present, the group of original promoters-this include serial entrepreneur Ramesh Vangal, former Pepsico CEO Christopher Sinclair, McKinsey honcho Rajat Gupta, US-Canadian Bronfman family of Seagram fame, the Chanderia family and current CEO Satyan Patel-holds 59.15% stake in Cambridge.

Lehman Brothers gets government approval to trade in G-Secs

Lehman Brothers Securities has obtained permission from the Foreign Investment Promotion Board (FIPB) to trade in government securities. The financial sector giant plans to invest Rs 225 crore here through a number of downstream subsidiaries, which will directly trade in securities. The downstream subsidiaries of Lehman Brothers will also take up underwriting, merchant banking and other financial services, apart from functioning as primary dealerships (PDs) for trading in government securities.

Read The Economic Times article.

23 foreign investment plans cleared by FIPB; plans included those of Reliance Communications, Lehman Brothers

The Foreign Investment Promotion Board (FIPB) approved foreign investments worth Rs. 5910.66 crores on Tuesday, reports The Economic Times. Of this amount, the major chunk is expected to flow into Reliance Communications by way FII investments worth Rs. 5400 crores. The company will raise this money through ADRs and GDRs worth $1.2 bn. The government also approved US investment bank Lehman Brothers’ planned investment of Rs. 225 crores in its Indian arm. Velcan Energy, a French power generation company has also got an approval to invest Rs. 200 crores in the Indian renewable energy sector. The company will now convert its operating company in India to an operating-cum-holding company. The FIPB has also given permission to Mauritius based Horse-Shoe Capital to invest Rs. 45 crores to make downstream investments in companies engaged in providing telecommunication infrastructure. The other approvals include a nod to Hong Kong-based Haier International for marketing and distribution of Haier brand mobile phones. The company plans to set up a joint venture with a foreign equity of 51% for single-brand retail. The government has also cleared the application of US-based Bloomingdale International, which will allow the company to set up a chain of five-star and three-star hotels in the country. The company will invest Rs. 8.6 crores as per the application. Singapore-based Sincere Watch has also got an approval to set up a wholly-owned subsidiary to set up duty free shops at airports, seaports and SEZs. Bank of Muscat has also got a go ahead from the board to invest Rs. 10.92 crores in an NBFC in India (See Related Post). Other approvals include Delta Plus’ plans to set up a JV with 90% foreign equity for warehousing and export activity. Deutsche Post international has been permitted to raise its stake from 49% to 51% in DHL Danzas, which is engaged in carrying on business of transportation, air freight and ocean freight.

UTI to divest 36.58% stake in SICOM

The Unit Trust of India has invited bids from financial investors to sell its 36.58% stake in State Industrial Corporation of Maharashtra (SICOM), the investment arm of Maharashtra government. UTI holds 40% stake in SICOM – 36.58% through Specified Undertaking of Unit Trust of India (SU-UTI) and 3.5% is held by UTI Mutual Fund (UTI AMC).

The bids have been invited for the entire 36.58% stake held by SU-UTI. Foreign investors, including International Finance Corporation (IFC), the private sector lending arm of the World Bank Group and DEG, one of the largest European development finance institutions, have approached investment bankers to take stake in SICOM. Standard Chartered Private Equity (SCPE), Lehman Brothers, Singapore’s Temasek Holdings and a couple of hedge funds may also be interested in picking up stake in SICOM (See Related Post).

Apart from UTI’s 40%, the Maharashtra government holds 49% stake in the corporation. The remaining stake is held by other financial institutions and employees.

Read the article in The Economic Times.

IFC, DEG planning to acquire a stake in SICOM

The private equity arm of the World Bank, the International Finance Corporation (IFC), and Germany-based DEG, one of the largest European development finance institutions, are eyeing a stake in the State Industrial Corporation of Maharashtra (SICOM), the investment arm of Maharashtra government. Standard Chartered Private Equity (SCPE), Lehman Brothers, Temasek and a couple of hedge funds may also be interested in picking up stake in SICOM.

Existing shareholder in SICOM, the Specified Undertaking of Unit Trust of India (SU-UTI) is planning to fully divest its 36.5% in SICOM. Both IFC and DEG have approached the investment banker appointed by SU-UTI for the divestment. UTI AMC holds another 3.5% in the corporation.

SICOM offers advisory services to the government of Maharashtra, Maharashtra Electricity Regulatory Commission as well as other corporates. It also gives investment facilitation services to MNCs as well as Indian companies who wish to setup their manufacturing units in Maharashtra. The company is launching a second venture fund and would be soon offering merchant banking, treasury management of state PSUs, real estate development through subsidiary or joint ventures.

Read the article in Business Standard.

Top investment banks back out of DLF issue

Two of the book running lead managers (BRLM), involved in the mega-IPO of real estate behemoth DLF have backed out of managing the issue. Enam Financial Services and JM Morgan Stanley seemed to disagree over valuations of the company with the DLF management, and have withdrawn from managing the issue. They have been replaced Lehman Brothers and Deutsche Equities, as per the revised prospectus filed with the Securities and Exchange Board of India (SEBI).

Nimish Kampani, CMD, JM Morgan Stanley, also happens to be a member of the SEBI’s capital markets committee.

Kotak Mahindra Capital and DSP Merrill Lynch have been retained as the global coordinators for the issue, so have been Citigroup, ICICI Securities and UBS AG as the other book-running lead managers for the issue. SBI Capital Markets is the co-book runner for the IPO.

This is the second time in which investment banks have backed out of an IPO. Earlier, during the IPO of low-cost airline operator Deccan Aviation, the BRLMs SBI Capital Markets, JP Morgan and ABN-AMRO Rothschild had backed off, citing differences over valuation. The issue was finally handled by Enam Financial Services and ICICI Securities.

Read the Business Standard article.