Here’s an update on what could turn out to be India’s biggest overseas corporate takeover. While Bharti Airtel and MTN have confirmed that they are in talks for a possible M&A deal, there are various new shades to the proposed deal. VC Circle’s round up on the developing story.

Non Compete Clause?
One of this can involve a ‘non-compete’ clause which would prevent Bharti to enter the 21 odd markets, where MTN has operations under its own brand. This makes sense as after the deal, MTN would be a part of Bharti and why would Bharti like to operate two brands in one market. However, on the flip side it would mean giving up on a strategy to expand under its own brand in the African market. This can become a cost element in the future as and when Bharti tries to make Airtel its global brand. Continue Reading »

Sequoia Capital funded non-banking finance company Manappuram General Finance and Leasing Ltd (MAGFIL) is planning to raise Rs 100 crore ifrom a “leading global bank”, says a report quoting a senior company official. The Kerala-based finance firm had raised Rs 70 crore from Sequoia and India Equity Partners.
The company will raise the equity ahead of the proposed merger of MAGFIL and the group company Manappuram Finance Tamil Nadu Private Ltd, the group chairman, V P Nandakumar, told media. He said the negotiations are on with the bank.
As for the financial numbers, the company has reported a 98 per cent increase in the net profit for the year ending March 31 this year at Rs 20.99 crore as aginst Rs 10.61 crore in the previous year. The sales increased 82 per cent at Rs 79.66 crore compared to Rs 43.65 crore in the last fiscal.
MAGFIL has 310 branches in 13 states, and it has plans to add 250 more branches this year, one fourth of which will be in Kerala.

Unfazed by volatility in real estate prices and the rising inflation, Indiabulls Real Estate Ltd has decided to go ahead with a $300 million (Rs1,254 crore) IPO in Singapore. In a stock market announcement on May 8, IBRE said that Indiabulls Properties Investment Trust (IPIT), a business trust registered under the laws of Singapore, is contemplating a public offer of its units. It has filed its prospectus with Monetary Authority of Singapore on May 08, 2008. Deutsche Bank and Merrill Lynch (Singapore) Ltd are the bookrunners, while DBS Bank Ltd is co-ordinating the offer, according to Mint. Indiabulls owns 53 per cent stake in the trust, while Farallon Capital Partners LP, a San Francisco-based hedge fund, owns the rest.
IBRE is India’s fourth biggest developer by market cap, and is partly owned by Goldman Sachs Group Inc. and Merrill Lynch and Co. The company plans to sell about 262 million shares of Indiabulls Properties Investment Trust, the company said in its IPO prospectus, Mint reported. The IPO will be done in next six months. Indiabulls now has six months to sell its shares. Continue Reading »

US based investment bank Jefferies has appointed Sidharth Punshi as a Managing Director and Country Head in India. Punshi will lead a team of investment banking professionals covering the Indian market. He joins from Goldman Sachs where he was Executive Director, Head of European IT Services and Software Sector in the Technology, Media and Telecommunications Investment Banking Group. Jefferies opened its New Delhi office in 2007.
Punshi was previously at Citigroup, working in London, New York, Hong Kong and Singapore. He has worked with clients like Atos Origin, Capgemini, Hewlett-Packard, IBM, Infosys, Reliance Communications, Wipro, among others. Punshi is a BSc (Hons) graduate from the London School of Economics. Continue Reading »

Middle East is turning a very important centre of international financial markets. We know that the oil-rich region is a major source of capital for private equity and buyout funds. Interestingly, Citigroup will be the first global financial powerhouse to realise that if its latest move is any indication. The US based banking group has sent Alberto Verme, co-head of its investment bank, to Dubai. Verme will be the first major US investment-banking chief to be stationed in Dubai. Verme will continue to share global responsibility for investment banking with Ray McGuire, who remains based in New York.
Citigroup said Verme’s assignment “underscores Citi’s commitment to the Middle East, one of the world’s fastest-growing and most important regions, and is consistent with Citi’s efforts to deploy its best leaders against its most important and promising growth opportunities.” It’s a coincidence that the region has one of Citi’s largest shareholders - Saudi Arabia’s Prince Al-Walid bin Talal (owns 5 per cent) - besides Abu Dhabi Investment Authority from whom Citi got a $7.5 billion life saving investment last November.
Interestingly, Citi has given a goby to India and China - considered the fastest growing markets - in favour of Dubai.

US-based Intercontinental Exchange Holdings Inc, which has an eight per cent stake in India’s National Commodity Derivatives Exchange (NCDEX), may have to pare its stake by three per cent to five per cent, according to the norms stipulated by market regulator SEBI.
The Atlanta based exchange has been approached by many financial institutions to acquire this stake, a report says, quoting ICE CEO Jeff Sprecher. He said he was being “approached by a host of institutions, including global exchanges, financial services companies and banks for the ‘extra piece’ it holds”. Continue Reading »

Eredene Capital Plc., the UK based company which invests in infrastructure projects and real estate development in India, has said that it will invest up to Rs 21 crore or 2.6 million pounds in a new logistic park at Kalinganagar in Orissa, India, through its joint venture partner Apeejay Infra-Logistics Pvt. Ltd.
The company is hoping to ride on demand from steel companies such as Tata Steel, ArcelorMittal, South Korean Posco, Jindal Stainless Steel and Nilanchal Ispat Nigam Ltd. who all have or are developing major plants in and around the Kalinganagar region. Construction of the park will start in the second half of 2008 with operations targeted to start in 2009. Continue Reading »

The India and US based power point (PPT) online sharing company SlideShare.com has received $3 million funding from a group of angels and venture capital fund Venrock Associates. SlideShare works on the same principle as YouTube - the difference is that the former hosts PPTs while the latter hosts videos. (We have used Slideshare on a few occasions, and have found it as a useful tool to share documents and presentations).
The high profile angels the company has got include Dave McClure, Mark Cuban, and Jonathan Abrams, besides others like Ariel Poler, Hal Varian, Yee Lee, and Saul Klein. Some readers may remember, Mark Cuban was the biggest critic of YouTube, and he called YouTube’s business model as nothing more than a hosting company for videos. SlideShare also does the same for PPTs. The company will also have to watch out for copyrighted and confidential PPTs.
SlideShare’s founders include Rashmi Sinha (CEO; in the picture), Jonathan Boutelle and Amita Ranjan. The company has Guy Kawasaki, among others, on its board. See the press release on their funding as an interesting SlideShare presentation.

In a significant development, Citigroup has reorganised its investment banking division globally by forming an Alternative Asset Group within the arm. The new unit will bring together groups servicing private equity and infrastructure funds, the bank said in an internal memorandum sent to its employees on Tuesday. The new Alternative Asset Group will be led by Chad Leat, a vice chairman in Citi’s investment bank, as chairman and Brad Coleman, the head of the U.S. financial entrepreneurs group, as global head. (Read the full memo here).
The restructuring is part of measures taken by CEO Vikram Pandit to stay fit. He has been facing from shareholders to cut costs, sell poorly performing businesses, or even break up the largest US bank.

It was only a year ago CitiGroup paid $800 million for Old Lane, the hedge fund of which the current Citigroup CEO Vikram S. Pandit (right) was a co-founder. If reports are to be believed, Old Lane is in trouble. Ten months after CitiGroup bought out the hedge fund (in an attempt to woo Pandit to its fold), the buzz is that almost all of the outside investors in Old Lane Partners are getting out. Old Lane, which had $4.5 billion in funds under management last year, is now down to just $1.5 billion.
Last month, Citi CFO Gary Crittenden said that clients would be permitted to redeem their investments in Old Lane. In a recent regulatory filing, the bank announced that most investors would exercise the opportunity to flee the underperforming hedge fund by July 31. Continue Reading »

UBS, the Swiss investment bank, seems to have been hit the hardest by the credit crunch. The bank has announced that it would sell $15 billion of subprime mortgage debt and cut 5,500 jobs in its investment banking business as part of a massive cleanup (see a Thomson report).
The subprime crisis in the United States and the worldwide credit market turmoil that followed have taken a heavy toll on UBS. In a hope to reap bigger returns and compete with Wall Street rivals, the Zurich based bank - once known for its conservative investment strategy - heavily invested in the market for subprime mortgage securities. Now UBS is digesting a net loss of $10.9 billion and write-downs on mortgage-backed securities of $19 billion in the first quarter, bringing the total to about $38 billion since the beginning of the crisis. Continue Reading »

Phoenix India Acquistion Corporation will acquire the identity of a “corporate”, and will lose its status as a special purpose acquisition company (SPAC) or a blank check firm. The SPAC, formed in 2005 by Raju Panjwani and Rakesh Akella, had failed to get the shareholder approval for the acquisition of 65 per cent stake in the wind energy company Citius Power Ltd by April 5 deadline. According to the blank check norms, the SPAC has to be disbanded and the funds (the trust has $58 million) have to be distributed to its shareholders.
In order to avoid the dissolution of Phoenix, the management managed to get the shareholder approval to remove the blank check company restrictions from the company’s charter. This enables the company to continue its corporate existence, past liquidation in a vote held on April 8. “This is the best way to preserve the company and create the most value for our stockholders”, the company said in a statement. The trust distributions were made according to the company on April 22. Phoenix had about $58 million in trust, according to its latest annual filing. Continue Reading »

VC Circle is expanding, and is looking for an editor and also a couple of experienced writers for the website. If you are a reader of the site, then you know what we write on; we cover everything related to private equity, venture capital, mergers and acquisitions, investment banking, corportate law, entrepreneurship and startups, policy implications for investors, human resources and so on.
Our requirements for an Editor are that he/she should be able to lead a compact team of writers, independently oversee the content and newsflow on the website, have an excellent sense of news, ideation skills, and commission articles and columns. If you are networked within the industry or corporate world, that will be an added advantage. Four to five years experience in a newsroom is desirable. Continue Reading »

Even though India’s foreign exchange reserves are brimming with $300 billion in cash, the government has ruled out setting up a sovereign wealth fund. Finance Minister P Chidambaram said in the Rajya Sabha that “there is no such proposal under consideration of the government at present.”
The Prime Minister’s Council on Trade and Industry, in its meeting held on December 18, suggested that there is a need to create a sovereign wealth fund of $5 billion to begin with for financing acquisition of companies abroad,” he had said.
However, Chidambaram maintained that no directive had been issued to the finance ministry and hence the question of any timeframe to set up such a fund did not arise. Continue Reading »

New Horizon Media Pvt Ltd (NHM), a Chennai based regional language book publisher, has received an undisclosed investment from Beacon India Private Equity Fund as part of its second round of funding. The Mumbai-based fund, part of Dubai-based Baer Capital, will pick up a minority stake in the company. This round also saw investments from existing promoters as well as Emergic Venture Capital (of Rajesh Jain), which had invested earlier in NHM in 2006 in the first round.
NHM, founded in 2004 by Badri Seshadri, K. Satyanarayan and R. Ananthkumar (the first two, graduates of IIT Madras, were the co-founders of cricket portal Cricinfo.com), is a multilanguage, multi-format publisher of both fiction and non-fiction through printed books, audio books, DVDs, the Internet and mobile platforms. NHM currently publishes in Tamil, English and Malayalam.
NHM is the first and probably the only Indian publisher so far to land institutional venture funding. Continue Reading »