PE investment in Indian firms crosses $5 billion for 2010

New Delhi: Private equity (PE) firms have invested over $5 billion in Indian companies so far this year, more than what entire 2009 saw, reports PTI.

The PE companies, however, have also sold off shares worth about $2.5 billion yet.

As many as 220 companies saw PE investment pouring in during the first seven months of 2010, or between January and July, while PE firms made an exit from 73 other companies.

According to data compiled by deal space research firm VCCEdge, the first seven months of 2010 have seen private equity deals valued at $5.1 billion, as compared to $4.3 billion in entire 2009.

PE firms generally exit from their investment through buyback of shares by promoters, open market transactions, merger and acquisitions and public offers.

During the month of July 2010 alone, PE investment in India rose by nearly 190% on year-on-year basis to $776 million. The number of deals also rose from 16 in July 2009 to 25 last month.

The average deal value doubled to $26 million last month, from $13 million in July 2009.

Financials, consumer discretionary and utilities were the most targeted sectors during the month, VCCEdge said in its monthly report on PE deals.

The largest deal for the month was $179 million investment in IDFC by Actis and investment arm of Malaysian sovereign wealth fund Khazanah.

This was followed by $110 million investment by Xander Real Estate Partners in Panchshil Realty, which is developing seven hotels in India under the American brand of Marriott.

A $64 million investment in Rei Agro by Blackstone and other PE firms and $59 million investment in Monnet Power by Blackstone also figured among the top five.

At the same time, there were 11 exits worth $169 million in July 2010.

These included WDC Ventures' $39.6 million exit from Wadhwa Group SPV, Citi Venture's $29.4 million sale from JBF Industries and Istithmar's $25.3 million sell-out of SpiceJet shares.

In total, there have been 77 exits by PE firms so far.

While there were 32 exits worth $824 million in the first quarter of 2010, another 30 exits worth $1.46 billion were seen in the second quarter.

However, there were only 38 exits in the first two quarters of 2009.


SFIO probing books of Subhiksha: Khurshid

New Delhi: The Serious Fraud Investigation Office (SFIO) is probing the account books of beleaguered retailer Subhiksha Trading Services, reports PTI.

"Investigation has been ordered u/s 235 of the Companies Act, 1956, into affairs of Subhiksha Trading Services, to be carried out by the SFIO," corporate affairs minister Salman Khurshid said in a written reply in Lok Sabha.

The Registrar of Companies (RoC) in Chennai started inspecting Subhiksha's books following complaints by a group of investors and former employees who alleged mismanagement of funds.

In 2007, ICICI Ventures, the second biggest shareholder in Subhiksha with a 23% stake, had also filed a complaint alleging diversion of funds through more than 100 shell companies.

Further, Mr Khurshid said that in the last three years (from 1 April, 2007, to 31 July, 2010) investigations into the affairs of 44 companies have been referred by the ministry to the SFIO and prosecutions have been filed by the fraud probe body under various sections of the Companies Act and the Indian Penal Code.


New investment policy for fertiliser sector soon: Jena

New Delhi: The government will soon unveil an investment policy for the urea sector, which would also help revive eight public sector urea factories now lying closed, reports PTI.

"A new investment policy is being worked out. It will be unveiled within a month," minister of state for chemicals and fertilisers Srikant Jena said during Question Hour in the Lok Sabha.

Fielding a barrage of questions, he made it clear that some of the urea plants lying closed could be re-started once gas linkages are arranged.

"We have asked the petroleum ministry for gas. The Cabinet has to prioritise allocation of gas," he said adding that the price of gas was yet to be determined.

To a question, Mr Jena said revenue sharing model was being considered for reviving the urea plant at Gorakhpur in Uttar Pradesh and the Centre was awaiting response from the state government.

As members continued to raise questions, speaker Meira Kumar suggested having a half-an-hour discussion on availability of fertilisers in the country.

On complaints from members about non-availability of desired fertilisers, Mr Jena offered to give constituency-wise break up of fertilisers made available across the country.

To a question on revival of Talcher urea plant, the minister said coal gasification route was being considered to revive the plant.


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