By
Grapevine: KKR, Carlyle, Apax circle JB Chemicals; RIL eyes NetMeds
Photo Credit: 123RF.com

Global buyout funds KKR, Carlyle, Apax Partners, and PAG have submitted non-binding bids to acquire JB Chemicals and Pharmaceuticals Ltd at a valuation of about Rs 5,000 crore ($650 million), multiple people in the know told The Economic Times.

JB Mody and family, promoters of JB Chemicals, have been engaged in talks to sell their 56% stake in the listed firm since May last year.

The group has a presence in several regulated and semi-regulated markets, including Russia and countries of the Commonwealth of Independent States. Its manufacturing units are in Ankleshwar, Panoli (Gujarat) and Daman and Diu.

Energy-to-telecom conglomerate Reliance Industries Ltd (RIL) is in advanced discussions to acquire a majority stake in online pharmacy Netmeds for up to Rs 150 million including a fresh infusion to expand its operations, three people privy to the development told The Times of India.

“The deal is happening at a slight premium to their last funding round valuation,” said one the persons cited above.

The existing backers of Netmeds include healthcare investor OrbiMed, MAPE Advisory, Sistema Asia Fund and Singapore-based Daun Penh Cambodia Group. The company last raised $35 million in its series C round of funding.

Reliance, previously acquired 82% in Bengaluru-based C-Square Info Solutions, which makes software for distributors, retailers and sales force in the pharma sector, for Rs 82 crore.

Meanwhile, Housing Development Finance Corp. Ltd (HDFC) plans to raise up to Rs 8,000 crore to prepare for future uncertainties amid widespread economic disruptions from the COVID-19 outbreak, four persons familiar with the development told Mint.

The capital raise could be done through a sale of shares to qualified institutional investors, sale of warrants, or a rights issue, the persons cited above said.

“The money will be used mainly to prepare the housing finance company to deal with higher provisioning costs and to expand inorganically through the acquisition of majority stakes in lending businesses at cheap valuations,” one of the persons said without disclosing his identity.

In another development, the government is looking to sell its entire stake in FMCG–hospitality–cigarette major ITC and Axis Bank Ltd to raise around Rs 22,000 crore by the end of this week or early next week, a private sector lender told The Economic Times.

The government held stakes through Specified Undertaking of the Unit Trust of India (SUUTI), which owns a 7.94% stake in ITC and 4.69% in Axis Bank, as on March 31, 2020, the report said.

For the current fiscal year, the government has sought to raise an ambitious Rs 2,10,000 crore from the sale of holdings in state-run companies. Minority stake sale in Life Insurance Corp (LIC) through an initial public offer and equity sale in IDBI Bank may fetch the govt close to Rs 90,000 crore.

Sources said that the various mutual funds and LIC are also expected to participate in the proposed share sale. “The proposed transaction is expected at a marginal discount of 2-3% to underlying trading price on the transaction date,” said a person quoted above.

Of the 51 companies, eight firms in which SUUTI owns significant stakes are — NSDL, STCI Finance, Over-the-counter Exchange of India, Stock Holding Corporation of India, UTI-IAS and UTI Infrastructure Technology Services, North Eastern Development Finance Corporation and NSDL e-Governance Infrastructure.

In the meantime, banks, which have significant exposure to both Future Retail Ltd and its promoters, are pushing the company to go for an all-stock merger with an existing retail player, Business Standard reported, citing a banker privy to the development. 

The move has been expedited after its promoter Kishore Biyani defaulted on loans in March and the firm’s share price collapsed from its recent high in February.

The lenders have approached India’s top retail players to evaluate the possibility of a merger, said a banker.

“The company may not get a good valuation due to the falling financial metrics. It is also short in cash of around Rs 200 crore (as of December 2019). Banks have, therefore, approached all big players, including Reliance Retail, to see whether they are interested in acquiring the company,” the banker added.

Leave Your Comment(s)