Economy Newsletter

1. Top Headlines
 Temasek To Buy 4.9% In Godrej Consumer For $135M
 Ujjivan Raises Rs 29Cr Through NCD Issue
 Strides Arcolab Sells Subsidiary Ascent Pharma To Watson
For $393M
 Zephyr Peacock Invests Up To Rs 50Cr In Gadhia Solar
 India Infoline Venture Capital Fund Raises Rs 500Cr Realty
Fund
 NTT Com To Acquire 74% In Netmagic Solutions; Nexus,
Fidelity Exit
 US Buyout Firm GenNx360 Opens Offices In Gurgaon,
Bangalore
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2. Weekly Executive Summary
India's food inflation declined slightly to -1.03 per cent for the week
ended January 14 as compared to -0.42 per cent for the previous week,
staying in negative territory for the fourth straight week, as prices of
essential items such as wheat, vegetables, potatoes and onions
maintained a downtrend. The inflation rate for fuel, however, remained
unchanged at the previous two weeks' level of 14.45 per cent, an official
statement said here today, quoting provisional data.
The Reserve Bank has sent a clear signal rates will be brought down in
the coming months. Indeed, its monetary policy review on Tuesday
emphasized growth rather than controlling inflation. RBI expects
inflation to moderate to the targeted 7% by March--- even as growth
falls to an estimated 7% from the old projection of 7.6%. But while RBI
believes interest rate cuts can wait, it has moved quickly to inject some
liquidity into the system. On Tuesday it cut the cash reserve ratio or CRR
by 50 basis points to 5.5%.
Moving on, Jet Airways is charting a new route towards reducing its
debt. The airline plans to sell nine or ten of its Boeing 737s by April. It
then plans to lease those aircraft back. The move will help it raise Rs666
crore. Jet has a debt of nearly Rs14, 000 crore. By leasing back its own
aircraft, it’s following a path that other airlines have also used in the
past to repair their balance sheets. Jet only owns 40 of the 101 planes it
operates.
Reliance Industries has set the dates for its planned buyback of some
120 million shares. The company said it would start the buyback on 1
February and end it on 19 January next year. RIL has set a maximum
price of Rs870 per share and could spend 2.1 billion dollars on the
buyback’s
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3. Inside The Story
Temasek to Buy 4.9% In Godrej Consumer For $135M
Singapore’s sovereign wealth fund Temasek is investing Rs 685
crore($135 million) to buy 4.9 per cent stake in consumer products firm
Godrej Consumer Products Ltd, in the single largest alternative
investment deal in the Indian FMCG industry.Temasek is investing
through a preferential allotment, making it the largest institutional
shareholder in Godrej Consumer, the flagship of the $3.4- billion Godrej
group. The Singapore government’s investment firm is picking up the
stake through Baytree Investments (Mauritius) Pte Ltd, an indirect
wholly-owned subsidiary. The fresh issue will be made at Rs 410 a
share, a little over 2 per cent premium to the last traded share price of
Godrej Consumer on Friday. The deal would help Godrej Consumer
finance its aggressive inorganic strategy, wherein it has acquired seven
companies across the world since 2010 and consolidated its holding in
two joint ventures.
Ujjivan Raises Rs 29Cr Through NCD Issue
Bangalore-based microfinance firm Ujjivan Financial Services Pvt Ltd
has raised Rs 29 crore ($5.8 million) through a private placement of
non-convertible debentures (NCDs). The NCDs were subscribed by
Developing World Markets (DWM) and listed on the Bombay Stock
Exchange.The transaction comes a little over a year after Ujjivan raised
Rs 40 crore through NCD placement with DWM only. The company
followed that up with two issues with Standard Chartered Bank totalling
Rs 55 crore. Ujjivan also raised over Rs 100 crore in debt funding from a
set of public and private sector banks, including SIDBI, among others.
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4. Strides Arcolab Sells Subsidiary Ascent Pharma to Watson
For $393M
Bangalore-based Strides Arcolab Ltd has sold its entire 94 per cent
holding in Ascent Pharma Health Ltd, its subsidiary operating in
Australia and South-east Asia, to NYSE-listed Watson Pharmaceuticals,
Inc., at an enterprise value of AU$375 million ($393 million).Ascent is
one of the top five generic pharmaceutical companies in Australia with
presence across several South-east Asian countries like Singapore
where it is the leading generic pharmaceutical company.As part of the
transaction, Watson also acquired the remaining 6 per cent
shareholding associated with Dennis Bastas, CEO of Ascent. The
transaction was signed and closed simultaneously.
Zephyr Peacock Invests Up To Rs 50Cr in Gadhia Solar
Private equity firm Zephyr Peacock has invested up to Rs 50 crore in
Mumbai-based Gadhia Solar. The solar energy company provides energy
solutions by using parabolic concentrated technology and has
implemented some of the world’s largest solar thermal systems during
the past two decades.
India Infoline Venture Capital Fund Raises Rs 500Cr Realty
Fund
India Infoline Venture Capital Fund, the private equity arm of the India
Infoline group (IIFL), has completed raising a Rs 500 crore fund dubbed
IIFL Real Estate Fund (Domestic) Series I, according to a company
statement. The fund will mainly focus on the Indian real estate sector
and invest in equity, debt and equity-linked instruments of promising
real estate and construction companies, which are either involved in
projects/ventures or have significant growth potential.
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5. NTT Com to Acquire 74% in Netmagic Solutions; Nexus,
Fidelity Exit
NTT Communications Corporation (NTT Com), a wholly owned
subsidiary of Nippon Telegraph and Telephone (NTT) Corporation, will
acquire 74 per cent stake in data services firm Netmagic Solutions Pvt
Ltd, the companies have jointly announced on Wednesday. According to
Telecompaper, the acquisition price is around 10 billion Japanese yen
(around $128 million).The addition of Netmagic Solutions’ datacentre
services and sites will expand NTT Com’s capability to provide one-stop
ICT solutions in the Indian market and also accelerate its global offering
of seamless Cloud services.
US Buyout Firm GenNx360 Opens Offices in Gurgaon,
Bangalore
US-based buyout firm GenNx360 Capital Partners has formed GenNx360
India Advisors Pvt Ltd, which will now operate out of two offices in
Gurgaon and Bangalore. Launched in 2006, GenNx360 specializes in
mid-market buyouts of industrial B2B companies. The firm focuses on
opportunities in industrial water treatment, specialty chemicals &
engineered materials, industrial machinery & equipment components,
Global transportation component parts (auto, rail and infrastructure,
aerospace & defense), oil & gas services (also, parts and equipment) and
business services like logistics. It looks to invest in companies with
revenues between $75 million and $500 million. GenNx360 is based in
New York City, with additional offices in Seattle and Boston. This
strategic initiative provides the firm with a truly global footprint,
establishing a presence in both India and Asia
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