Indian Startups Blog

Mumbai-based real estate developer Nirmal Lifestyle is in talks with Deutsche Bank, Lehman Brothers, Goldman Sachs, ICICI Venture and HDFC Realty to sell stake in some of its property projects. According to a report, Nirmal Lifestyle, which transformed Mulund as a happening suburb, may raise $500-$800 million from private equity funds. It is in the process of developing 20 townships under the brand name Lifestyle City across India and has completed land acquisition. Besides private placement the firm is also looking to go public.
The report adds that Anand Jain (Mukesh Ambani’s close associate)-promoted real estate and infrastructure fund, Urban Infrastructure Opportunities Fund (UIOF), has already struck a $50-100 million deal with Nirmal Lifestyle for a minority stake in one of its Mumbai projects. (more…)

India’s best known first generation entrepreneur Sunil Bharti Mittal is now readying for his biggest move overseas. Mittal’s Bharti Airtel has reportedly put in a bid for a 51 per cent stake of South Africa’s leading telecom player MTN, which could cost the Delhi based company about $18 billion. If the deal indeed goes through, that will be the biggest overseas acquisition by any Indian company.
London’s Financial Times reported, citing unidentified people, that Bharti has tabled an indicative bid for a controlling share in MTN at about 165 rand ($21.8) a share. Bharti has secured $12 billion of financing from Goldman Sachs Group Inc. and Standard Chartered Plc, the newspaper added. The remainder would be funded with an issue of equity, either to MTN shareholders or to institutions.
The deal is at earlier stage. Mittal, Bharti’s founder and chairman, has been quoted as saying by Financial Times: “We’re delighted that they’ve chosen to talk to us. It confirms Airtel’s standing in global telecoms, but whether it will lead to anything, I don’t know.” He also said that he had been “overwhelmed by the kind of response” he has had from the banks. (more…)

It may be a bit late, nevertheless it’s better than never. The state-owned Corporation Bank is planning to offer investment banking and related services through its wholly owned subsidiary CorpBank Securities Ltd, reports The Hindu Business Line. The paper quotes B. Sambamurthy, Chairman and Managing Director, as saying “We are examining a couple of activities in the capital market area, like investment banking.” However, the bank does not have plans to enter retail broking. (more…)

PremjiInvest, a new private equity fund sponsored by Wipro’s Azim Premji, has made its maiden investment of $20 million in HealthCare Global Enterprises Ltd. (HCG), a Bangalore based oncology care company. This is the second round of private equity investment in HCG. In July 2006, IDFC Private Equity invested Rs 50 crore ($10.8 million) in HCG.
PremjiInvest’s capital would be used for backward integration in cancer management on a pan-India basis and make cancer treatment accessible to all segments of the society, a press release said. The company also plans to use the capital to pursue an “Hub and Spoke” model of cancer care centres nationally. Prakash Parthasarathy and Bobby Mustafa of PremjiInvest have been inducted into the Board of HCG. (more…)

In February, when George Soros invested $100 million in Reliance Big Entertainment, the internet, media and entertainment arm of the Anil Dhirubhai Ambani Group (ADAG), for a three per cent stake, valuing the company at $3 billion, the news took everyone by surprise. Because, most of all those businesses – held under Reliance Entertainment -were either at business plan stage or charecterised by earnings potential rather than actual earnings.
Now in just a span of three months, here is another news that Reliance Entertainment is in talks with private equity biggies like Kohlberg Kravis Roberts & Company (KKR), billionaire investor Carl Icahn, Japan’s Softbank and Abu Dhabi Investment Authority for selling 10 per cent equity (via The Economic Times) for a rumoured valuation of $5 billion. This number would be a rumour at this stage, however critics argue it has done nothing yet to command this number. (more…)

New lines of businesses have started bearing fruits for IDFC. The acquisition of the mutual fund business of Standard Chartered in India at the fag end of FY’08 and picking majority stake in I-banking firm SSKI has brought in close to Rs 243 crore in income for the year 2007-08.
While this constitutes just about 8.7 per cent of the consolidated income from operations (Rs 2,795 crore) during the year, the two heads combined contributed about one fifth of the total increase in the consolidated income from operations. The AMC business was acquired just two months back and IDFC hiked its stake in IDFC-SSKI recently making it a subsidiary.
Fees from its asset management business was at Rs 56 crore for the year while the income from the I-banking subsidary was Rs 187 crore during the year. In the fourth quarter the I-banking arm brought in about Rs 63 crore to the firm. IDFC had hiked its equity holding in IDFC-SSKI from 33.33 per cent to 79.8 per cent during the year making it a subsidiary whose financial numbers are now part of the consolidated results of the financial services major. (more…)

Exclusive: Canvera, a Bangalore-based company that provides online/offline services to professional digital photographers, has raised an undisclosed amount of Series A funding in a round led by Footprint Ventures, and joined by Draper Fisher Jurvetson, Mumbai Angels and a couple angels from the UK. Josh Bornstein from Footprint and Mohanjit Jolly from DFJ have joined Canvera’s board.
Canvera, founded by IIT Bombay graduates Dhiraj Kacker and Peeyush Rai, provides customised wedding albums, photobooks, calendars and traditional photographic prints – mainly to professional photographers even though a general consumer can avail of their service (there are already a couple of companies like Picsquare and GKVale.com, both in Bangalore, catering to consumers). The company has a centralised manufacturing unit in Bangalore (which is already functional) and will use technology to reduce the pains of a professional digital photographer in printing and creating photobook/albums. The turnaround time promised by Canvera is 24 to 48 hours. (more…)

Sandalwood Partners, the Santa Clara headquartered early stage VC firm, is raising its second fund to the tune of $350 million, according to a report. It currently operates runs a $120-million fund. The new fund is in anticipation of an increase in deal-flow as well as the number of partners, the report said. The second fund will be sector agnostic and will look at early-stage investment opportunities across different industries.
Sandalwood usually invests in the range of $10 million, and those with the potential to develop intellectual property (IP). It typically looks at investments in the areas of telecom, outsourcing services, technology and renewable energy in India and China. It just concluded an investment of $2 million in a Bangalore based unnamed luxury mobile phone company. (more…)

Dubai-domiciled Millenium Private Equity, which invested in Indian tower company Bharti Infratel, is launching two funds: the Global Energy Fund and the Telecom Media and Technology Fund, each worth $1 billion. It recently closed the sponsors’ round of funding for its inaugural Global Energy Fund at $200 million and Telecoms, Media & Technology (TMT) Fund at $150 million.
Both funds are Shari’ah compliant. The funds will aim for a gross IRR in excess of 20 per cent and have a life of seven years. Some of this capital is likley to find its way to India too. In 2007, Millennium placed $100 million in a private placement in Bharti Infratel, India’s largest telecoms infrastructure player.
Each portfolio company investment will be between $20 million and $100 million and have a horizon of two to four years. Millennium Private Equity has seven funds. The five other funds in the portfolio include financial institutions, natural resources, infrastructure, real estate, and health and education, which will be launched in the near future.

Mahindra & Mahindra, one of India’s largest utulity vehicle makers, has sold 3.68 per cent stake to Goldman Sachs for Rs 700 crore via issue of fully and compulsorily convertible debentures (FCDs) which will be converted into equity within 18 months. This is the first time in its 62-year history the family-run utility maker raising money from external investors. The money will be used to invest in tractor and auto business, as M&M plans to spend Rs 7,000 crore over the next three years to double its capacity 650,000 vehicles. Kotak Mahindra Capital was the exclusive financial advisor to the deal.
The board of M&M decided on Saturday to sell 9.39 million convertible debentures (at 9.25 per cent per annum) to Golboot Holdings Ltd., an affiliate of Goldman Sachs, at Rs 745 each to raise Rs 700 crore. The debentures will be converted into equity shares anytime within 18 months of the issue of FCDs at the option of the investor, and mandatorily at the end of the 18th month. The issue constitutes 7.91 per cent premium to the Friday’s closing price of Rs 690.35 for Mahindra shares. On Monday morning, the shares are undergoing profit-booking with a slight decline of 2 per cent. (more…)