Tuesday, December 25, 2007
Friday, December 21, 2007
India Inc signs deals worth $68.32 b in 2007
Steel & telecom were hot sectors
Our Bureau
Mumbai, Dec. 20 India Inc was on a shopping spree in 2007, striking deals including merger and acquisition (M&A) and private equity investment worth $68.32 billion against $28.16 billion last year, a rise of 142.61 per cent, according Grant Thornton’s Dealtracker
It was $18.35 billion in 2005.
The average Indian M&A deal size was close to $77 million, while the average Indian PE deal size was around $44 million in 2007. Corporate India signed 661 M&A deals valued $51.17 billion in 2007 against 480 deals worth $20.30 billion in 2006.
There were 313 domestic deals (both acquirer and target being Indian) with an announced value of $2.83 billion and 348 cross-border deals of $48.34 billion. 240 of the cross-border deals were outbound deals (Indian companies acquiring businesses outside India) with a value of $32.73 billion and 108 were inbound ones of close to $15.61 billion.
Mr Harish HV–Partner, Corporate Advisory Services, Grant Thornton, said, “There is strong growth in cross-border deals, as India Inc is going with gusto across the world buying up companies. This is different from the State-led acquisitions that of China Inc where the deals are big, strategic for China and comes with a significant element of push and support from the Government.”
Private Equity
The value of private equity deals in 2007 went up by 118 per cent to $17.14 billion. It was $7.86 billion last year. There were 386 private equity deals in 2007 against 302 last year. In 2005, private equity investors pumped in $2.03 billion through 124 deals.
The number of high value deals jumped significantly in 2007. There were 48 deals of over $100 million and 77 deals of $50 million in 2007 as compared to 11 deals of over $100 million and 29 deals of $50 million in 2006.
Hot sectors
Steel and telecom sectors were the clear leaders. The two sectors cornered $14.9 billion and $11.3 billion, accounting for about 50 per cent of the total M&A deal value in 2007. Tata Steel’s acquisition of Corus for $12.2 billion and Vodafone’s majority stake in Hutchison Essar for $10.83 billion were the major deals that went through.
In 2006, sectors like IT & ITeS and pharma, healthcare and biotech had the highest value of M&A deals, unlike the M&A trend in 2007.
PE investment
The highest proportion of PE/Venture Capital investment was made in real estate and infrastructure and banking and financial services sectors with an investment of $6.44 billion and $3.09 billion. The two segments account for over 55 per cent of private equity investment made in India in 2007.
The major PE investments in these sectors were a $1,000 million investment in GMR Infrastructure by a group of private equity investors, besides ICICI Venture’s investment of $800 million in Jaypee Group and Carlyle Groups 5.60 per cent stake in HDFC for $650 million.
IT and ITES led volume charts with 66 deals. This was followed by Real Estate & Infrastructure Management and Banking & Financial Services sectors with 58 and 57 deals respectively.
Thursday, December 20, 2007
Hypo invests Rs 600 cr in Shriram realty
Raghuvir Badrinath / Chennai/ Bangalore December 21, 2007
Hypo Real Estate Group, the German commercial real estate financing conglomerate which manages billions of dollars of assets globally, is understood to have invested Rs 600 crore to finance three projects being executed by the Bangalore-based Shriram Properties.
The management of Shriram Properties declined to comment.
Shriram Properties, the Rs 450 crore real estate arm of the Rs 25,000 crore diversified Shriram Group which has business interests covering real estate, truck financing, insurance, consumer finance and information technology, employs over 15,000 people in its various verticals.
According to industry information, Hypo's infusion will be for commercial projects spread over 6 million square feet, predominantly in South India with a heavy focus on the Chennai market. However, it is not clear if Hypo has taken an equity exposure in these projects or channelled this as debt.
According to industry sources, the investment is the second one for Hypo in India after it took a Rs 380 crore exposure in Tanglin Development promoted by V G Siddhartha who runs the Cafe Coffee Day chain.
Shriram Properties, in the recent past has been on a fund-raising spree and has raised around Rs 1,000 crore from US-based private equity players Walton Capital and Starwood Capital Group.
In addition to investing substantially in an integrated township project being developed by Shriram in Kolkata, Walton and Starwood recently invested $100 million at the enterprise level in Shriram Properties.
The Kolkata project, estimated to cost Rs 5,000 crore, represents one of the largest-scale partnerings of global real estate private equity firms in India, will be on land previously belonging to the Hindustan Motors plant in Uttarpara, and will comprise approximately 20 million square feet of residential, retail, office and civic infrastructure.
Shriram Properties was founded in 1995, and over the past 12 years has built over 4.5 million square feet of residential and commercial space in Bangalore, Chennai, Coimbatore and Hyderabad.
The company has built a team of almost 300 people in five offices throughout India, and is presently developing a portfolio of 70 million square feet of space across India, including residential, office, retail, hotel and civic infrastructure. The company after establishing a decent presence in South India is now looking to branch out to Northern and Western Indian markets.
Industry information further suggests that Shriram Properties is also gearing up for an initial public offer next year through which the company is expected to raise close to Rs 900 crore.
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