VCCircle

There is a new twist to the Hutch tale. The Economic Times reports that buyout fund KKR is in talks with Anil Ambani's Reliance Communications (RELCOM) to buy out Hutch's wireless assets in India. The Wall Street Journal had earlier reported that buyout funds like Blackstone, Texas Pacific Group, and also Indian telco RELCOM were in talks to buy the Hutch stake in Indian telco Hutchison Essar, India's third-largest GSM operator with a subscriber base of 16 million.

“It is very preliminary as of now. There are a number of unknowns in a transaction of this type,” ET quotes an investment banking source. Hutchison seems to be planning to exit Indian market since it's not sharing a great relationship with its Indian partner Essar. Also, Hutch can cash out at a price of $8 billion for its two-third stake in Hutchison Essar. The Indian partner Essar owns 33 per cent stake.

The report also says that Texas Pacific Group and Malaysia's Maxis had made a bid last week for 100 per cent of Hutchison-Essar at an enterprise value of $13.5 billion. The bidders approached Canning Fok, chairman of Hutchison Telecom International, the parent of Hutchison Essar, who was in India on a brief visit, says ET. The bid was believed to be turned down.

There is definitely something cooking up.

Related:

Blackstone, Texas Pacific, Reliance Com May Consider Acquiring Hutch Assets In India: WSJ

Hutch To Exit India? Will Essar-PE Firm Combine Buy Them Out?

Idea Cellular Ltd plans to raise upto Rs 2875 crore ($641.7 million) through the IPO. Of which, a 15 per cent will be raised through a pre-IPO placement, reports Reuters. That's about Rs 431 crore ($95 million) that will be raised from investors pre-IPO. The IPO is managed by JM Morgan Stanley and DSP Merrill Lynch, with Citigroup and UBS as co-managers.

So far a few private equity investors have invested in Idea Cellular.

The latest was Sequoia Capital India's investment of $42 million for a 1.5 per cent stake in the Pune-based telecom company. Providence Equity Partners picked up close to 15 per cent for $400 million, while Chrys Capital invested about $100 million for a little less than 4 per cent stake. The other investors in Idea include TI TA Associates of UK, Citigroup Venture Capital International and Maquarie Bank of Australia. All this placement has happened at a valuation of $2.8 billion.

The proposed pre-IPO placement (15% of the issue) will be done at the IPO price. This is expected to be at 20 per cent premium to the private equity placement.

Clarification: Citing an Economic Times report, I had mentioned that Sequoia Capital India has paid more than what other private equity players have paid for their stake in Idea. It turns out that it is wrong. Sequoia has indeed picked up the stake in Idea at the same valuation ($2.8 billion) as Providence and ChrysCap.

Related:

Sequoia Capital Picks Up 1.5% Stake In Idea Cellular

ChrysCapital Invests $122 Million In Idea Cellular; Providence Puts In $400 Million

GLG Partners Pick Up 8% In Idea Cellular For $213 Million: Report

Four Funds Pick Up 25% In Idea Cellular

Idea Cellular Files Draft IPO Prospectus; The Issue To Raise Rs 2,500 Crore

Indian travel portal Cleartrip.com has got second round funding of $8 million, according to a report in VentureWire. DAG Ventures has led the round and is joined by the return backer Sherpalo Ventures. It's not clear if Kleiner Perkins, which alongwith Sherpalo had invested $5 million in the first round early this year, has participated in the current round. [Via ContentSutra.com]

Travelguru recently announced $15 million in series B VC funding from Battery Ventures and the existing backer Sequoia Capital India. MakeMyTrip has also tied up more than $10 million in funding from Helion Venture Partners, Sierra Ventures and SIAF Partners.

Who said the aviation business is not promising? Not in India at least, even though most of the market players are losing money. Investors are queueing up to invest in budget airline SpiceJet Ltd. The company's board has decided to issue shares on a preferential basis to investors to the tune of $80 million. Apparently the airline has got investment proposals worth $118.5 million from the investors. The potential investors include the Tata Group, private equity funds Texas Pacific Group Ventures, Istithmar PJSC and Goldman Sachs.

According to a report, Tata group firm Ewart Investments has offered to invest $16 million and Tata Investment Corp. Ltd $1.2 million (about 7.5 per cent . Texas Pacific has offered $30 million, Istithmar $25 million and Goldman Sachs $5 million. The shares have been placed at Rs 51.40 a share.

Dubai-based Istithmar currently holds 10 percent of SpiceJet.

This is interesting. Earlier, SpiceJet was planning to raise only $60 million through a plain vanilla equity sale. With the current interest, the airline upped its fund raising to $80 million. Spicejet has already raised money twice -- through a $80 million overseas convertible bond issue and a $12.5 million stake sale to Istithmar - since it began operations in May 2005, says Reuters.

SpiceJet had revenues of Rs 453 crore ($100 million) in the business year ending May 2006.

Coimbatore-based textile and apparel company KPR Mills has received private equity funding to the tune of Rs 105 crore from Blue River Capital, and joined by other investors Brandot International and Argonaut Private Equity, reports The Economic Times. KPR Mill, which has revenues of Rs 450 crore, owns spinning, knitting and garment making facilities.

Brandot International is owned by Martin Trust, a leading serial investor in the global apparel and textile space. This will be his first investment in India. There are also reports of Trust forming a 50:50 JV with south-based Bannari Amman in apparel exports space.

KPR Mills is now preparing to go for an IPO.

The funds will be used to part-fund its Rs 500-crore expansion, while the rest of the funds have been raised as a loan under the Technology Upgradation Fund Scheme (TUFS). The company is now working on doubling its spinning capacity from the existing 1,10,000 spindles. It will also set up a new garment making facility in Coimbatore, which is expected to boost its Rs 140-crore export business.

Blue River Capital is founded by Shujaat Khan and affiliated with Edelweiss Capital. In April, Blue River invested $10 million in Aurangabad Electricals. Argonaut Capital, backed by American billionaire George Kaiser, recently invested $10 million Koutons Retail, a Delhi-based men's retail company.

While a whole host of private sector companies entered the booming aviation business in India in the last three years, the country's top business house Tatas were missing in action. This is despite the fact that Tatas owned Tata Airlines (set up in 1932), the previous avtar of Air India. Its joint venture plans with Singapore Airlines also did not take off. But now it looks like Tatas also want a share of the pie - especially in the domestic aviation business.

The Mumbai-based business house is believed to picking up 10 per cent stake in the low-cost airline SpiceJet.

The investment will be made through Tata group’s financial arm Ewart Investments, and may be worth about Rs 100 crore ($22.5 million), reports The Economic Times. The SpiceJet board is meeting in Delhi on Monday to consider the allotment of preference shares to Ewart. The transaction may be done at a price close to Rs 51 per share. On Friday, SpiceJet shares closed at Rs 53.45, up about 5 per cent. It looks like the market had a wind of the deal.

Tata's investment is reportedly a financial one, and not strategic. So going by that, Tatas are not really entering the aviation business, but is acting like a private equity player. Ewart Investments is a subsidiary of Tata Sons.

In a related development, SpiceJet is planning to raise about $60 million from private equity firms. So Tata's investment is only part of it, and more is to come. SpiceJet had raised $70 million through an FCCB issue. Last December, Istithmar PJSC, the private equity arm of the government of Dubai, also picked up 3.3 per cent stake in the company for around $50 million.

Here is the biggest deal in Indian telecom if it goes through. The Wall Street Journal reports (under the sub wall) that buyout funds Blackstone and Texas Pacific Group are "considering a possible acquisition" of the stake of Hutchison Telecommunications International in the Indian telecom business Hutchison Essar. The deal could be as big as $8 billion, Journal reports.

The report also says that Blackstone may join hands with Reliance Communications Ltd for acquiring Hutch. The report is however unconfirmed, while a Hutch spokeswoman refused to comment.

Hutchison Telecommunications controls about 67 per cent of Hutchison Essar, while Essar Group, the Indian JV partner, controls 33 per cent. Hutch, a GSM player, operates in 16 of the 23 telecom circles in India. It has over 18 million mobile subscribers in India.

The Reliance Communications angle is interesting. The company is toying with the idea of entering GSM service nationally, and this could be a good strategy to acquire the national presence in one shot ratjer building it ground up. Reliance Communications is a CDMA player, while its subsidiary Reliance Telecom is a GSM player in essentially eastern states.

(Hat tip to Vijay)

Updated: Sequoia Capital India has picked up 1.5 per cent stake in Idea Cellular for $42 million. That's at an enterprise valuation of $2.8 billion, similar to the other recent private equity deals in Idea Cellular.

It's better late than never for Sequoia Capital India. The Bangalore-based venture capital-cum-buyout firm has picked up a small stake (about 1.5 per cent) in the IPO-bound Idea Cellular for around $48 million. The Economic Times reports that the deal has happened at a higher price than what a few private equity funds like Chryscapital and Providence Equity Partners paid for their stake in Idea last month.

ChrysCap and others have reportedly picked up Idea shares at around Rs 50-53. Since Sequoia has entered at the pre-IPO round which means their acquisition price will be equivalent to the IPO price. I heard some anlysts on CNCB TV18 channel saying that Idea may fix the IPO price band around Rs 60.

US-based Providence Equity Partners has picked up 15 per cent in Idea Cellular for about $400 million, while UK-based hedge fund group GLG Partners has picked up 8 per cent equity for about $213 million. TA Associates of the UK has also bought a small stake for an undisclosed amount, while Citigroup and ChrysCapital also have entered the company with some 4-5 per cent each.

Idea Cellular has filed a draft red herring prospectus with SEBI to raise about Rs 2,500 crore through its IPO. The company plans to dilute 15 per cent through a pre-IPO placement, and Sequoia's deal seems to be part of it. Idea has appointed Citigroup Global and UBS Securities as senior co-book running lead managers, while JM Morgan Stanley and DSP Merrill Lynch will be the lead managers for the IPO.

Sequoia has been increasingly doing private equity deals. It recently bought out 9 per cent stake in Flextronics Software alongwith the buyout fund KKR. Sequoia has raised a third fund of $400 million for buyout activities.

The investment in Idea Cellular is definitely a good "idea" since telecom companies are expected to do well in India, the fastest growing mobile market in the world. There are only two listed companies in the space - Bharti Airtel and Reliance Communications and both are hot stocks in Dalal Street.

Related:

ChrysCapital Invests $122 Million In Idea Cellular; Providence Puts In $400 Million

GLG Partners Pick Up 8% In Idea Cellular For $213 Million: Report

Four Funds Pick Up 25% In Idea Cellular

Idea Cellular Files Draft IPO Prospectus; The Issue To Raise Rs 2,500 Crore

Just saw it on CNBC TV18 channel. JP Morgan has invested $60 million in Mumbai-based real estate company Lodha Group. The funds will be used to develop its latest project - a high-end residential complex called Lodha Bellissimo. They are building a 50-storay tower in South Mumbai which is targeted at high networth individuals.

Established in 1980, the Lodha Group has developed several projects (a total of 5 million sq feet) across prime locations in Mumbai like Mahalakshmi, Prabhadevi, Worli Seaface and nearby Thane.

Mangal Prabhat Lodha is the chairman and managing director of the company.

In August this year, JP Morgan raised a $360 million real estate fund for India. Christened India Property Fund, it will invest across the office, residential, industrial/warehouse, retail and hospitality sectors. The fund will target locations like Mumbai, Bangalore, Chennai, Kolkata, Hyderabad, New Delhi, and Pune, besides selective investments in other B grade but fast growing cities like Surat, Vizag and Nagpur.

Here is the first publicly announced M&A deal in the Indian Web 2.0 space. MIH Web Private Ltd, the Indian arm of South African media giant Naspers, has acquired two Indian websites Bixee.com and Pixrat.com. The financial terms are not disclosed. Bixee.com, a vertical jobs aggregator, and Pixrat, a photo bookmarking site, are a part of RHR Networks, a startup based in Bangalore and founded by ex-Yahoo employees Rajesh Warrier and Ruban Phukan. In addition to all assets of Bixee.com including technologies, the founders and team of Bixee.com will become a part of MIH India. It's also not clear the user base of these sites.

MIH India has grand plans for social networking, blogging and photo sharing in India, and it has already laucnhed the beta version of its web site called ibibo.com.

Contentsutra has more details here.