Grapevine: PE firms circle Edelweiss arm; TA Associates eyes Piramal Pharma

By Ankit Agarwal

  • 20 May 2020

Bank of Singapore and several global private equity funds including Blackstone, KKR and Apax are in the race to acquire a minority stake of up to 20% in Edelweiss Global Investment Advisors (EGIA), the investment and advisory business of Edelweiss Financial Services.

The deal could value the business at up to $1 billion, four people with direct knowledge of the development told The Economic Times.

A stake sale will help Edelweiss that is battling rising bad loans and liquidity issues to raise funds for its credit businesses.

Last year, US-based Kora Management and private equity firm Sanaka Capital separately invested in the company and now together holds about a 12% stake in EGIA.

Meanwhile, TA Associates is in advanced talks to acquire up to 20% stake in Piramal Pharma, a unit of Piramal Enterprises Ltd, for up to $500 million, people familiar with the matter told BloombergQuint.

Piramal aims to reach an agreement in June, however, no final decision has been taken on the sale, and talks could be delayed or fall apart, the people said.

KKR & Co. was earlier competing with TA Associates for the stake, the people added. 

In another development, Electricity Transmission Company Power Grid Corp. of India Ltd plans to file a draft prospectus for up to $1 billion infrastructure investment trust (InvIT) by the end of June, two people aware of the matter told Mint.

The IPO of the Power Grid Infrastructure investment trust will only be the third such public offering in the Indian markets and a first from any state-owned company. An InvIT is a pool of money collected from investors to run operational infrastructure projects in return for a regular yield to its unitholders.

The National Highways Authority of India is also preparing to raise funds through this route.

In May 2017, road developer IRB Infrastructure Developer Ltd launched the first IPO for an infrastructure investment trust—IRB InvIT Fund.

In the same month, transmission projects developer Sterlite Power Grid launched the IPO of its infrastructure investment trust—India Grid Trust.

Also, Tata Steel Europe seems to have resumed talks with Germany’s Thyssenkrupp for a possible merger after their plan to form a landmark joint venture was rejected by EU antitrust regulators last year.

Investment bankers told Business Standard that both Tata Steel and Thyssenkrupp are facing a tough financial situation and will take steps to sell some assets so that they can meet Europe’s anti-competition norms.

Separately, Piramal Capital & Housing Finance, a unit of Piramal Enterprises is in talks to sell $300 million (Rs 2,200 crore) worth of loans advanced to three renewable energy companies -- ReNew Power, Atria Power and Acme Solar to Brookfield Asset Management, two people with direct knowledge of the matter told The Economic Times.

Canada’s Brookfield plans to build a credit portfolio in India and consolidate its investments in the renewable power sector, one of the persons said.

Piramal now plans to sell the loans in the face of financial pressure following the COVID-19 pandemic, according to people aware of the plans. Piramal has also reached out to potential buyers to sell loans given to other renewable energy firms.

According to the report, Brookfield is looking to invest in renewable energy companies. “Brookfield is evaluating whether the three renewable energy companies need any additional funding. They could invest or lend to these companies,” said another person.

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