Weekly Indian Newsletter 24dec2011

1. Top Headlines
Mytrah Energy India Raises Rs 100Cr In Mezzanine
Funding.
Britannia merges dairy & biscuits sales teams.
Mukesh Ambani in talks to buy Network 18
Redington to acquire 25.97% stake in overseas arm
Everstone Capital Buys 45% In Pind Balluchi
Shriram Capital To Buyback Sanlam Stake
Not-for-profit Teach For India Secures $2.5M From
Omidyar Network
Zydus Cadila buys out Biochem Pharmaceuticals.
TPG Capital To Acquire Over 20% In Public-listed Shriram
Transport.
Actis buys $71m stake in Endurance
ABB bags Rs 4,000 cr order.
RBI slaps Rs 5 lakh penalty on Gondal Nagrik Sahakari
Bank
Inside The Stories
Mytrah Energy India Raises Rs 100Cr In Mezzanine Funding
Hyderabad-based Mytrah Energy India Ltd (MEIL), a wholly owned subsidiary
of London Stock Exchange-listed Mytrah Energy, has raised a fresh tranche of
Rs 100 crore ($19 million) in mezzanine funding for a four-year term from
PTC India Financial Services.It is expected that relevant documentation and
drawdown of this tranche will be completed by mid-January of 2012. Mytrah,
an independent power producer, owns and operates wind farms in India. The
company, formerly known as Caparo Energy Ltd, changed its name to Mytrah
in September 2011. Mytrah has secured new senior loan funding of Rs 960
crore ($192 million), comprising Rs 600 million ($120 million) underwritten
by IDFC and Rs 360 crore ($72 million), which is at an advanced stage of
syndication.
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2. Britannia merges dairy & biscuits sales teams
Britannia Industries has merged the sales team of its dairy portfolio with that
of the more established biscuits business to tap new towns and achieve
greater bargaining clout with retailers. Rivals see it as a move to cut costs
when margins are under pressure. The Wadia Group company has also started
using cycle-rickshaws to sell bread in Delhi neighbourhoods as part of a drive
to increase the reach and speed of marketing.This moves helps to improve
profitability of the country's leading biscuit marketer, with a 31.7% value
share. Britannia posted a net profit margin of 2.9% in the quarter ended
September due to high cost of raw materials such as milk and cashew nuts.
Mukesh Ambani in talks to buy Network 18
Mukesh Ambani, the chairman of Reliance Industries, India's biggest
conglomerate, is in talks to buy Network 18, the television and internet
company, the Wall Street Journal said quoting people familiar with the
situation. Ambani, the paper said, has been in talks with Network 18 founder
and controlling shareholder Raghav Bahl on the issue. Network18 Media and
Investments, the holding company for the conglomerate, has annual revenue
of about $300 million but isn't profitable
Redington to acquire 25.97% stake in overseas arm
Redington (India) Ltd will acquire 25.97 per cent stake of its overseas
business holding arm Redington International Holding Ltd from private equity
fund Investcorp for $113 million. Currently, Redington India owns 69.94 per
cent stake in the Cayman Island-based arm through a 100 per cent wholly
owned Redington International Mauritius Ltd. Through the transaction
Redington India's ownership in Redington International will increase to 95.56
per cent, and the balance will be held by the company's employees.
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3. Everstone Capital Buys 45% In Pind Balluchi
Everstone Capital, a private equity firm managing assets worth over $1.5
billion in India, is acquiring 45% stake in New Delhi based restaurant chain
Pind Balluchi, as financial investors continue to show big appetite for the
domestic food and beverage story. Everstone will invest about $20 million in
JS Hospitality Services, which operates about 30 Pind Balluchi restaurants,
mostly in the National Capital Region, serving north Indian cuisine.
Shriram Capital To Buyback Sanlam Stake
Shriram Capital plans to buy back 26 per cent shareholding held by its South
African partner Sanlam group in their two insurance joint ventures in India —
Shriram Life Insurance and Shriram General Insurance — to comply with the
sectoral limits on foreign direct investment in the insurance sector imposed
by the Indian government. Shriram Capital is the holding company of the Rs
30,000 crore Shriram group's financial services business.
Not-for-profit Teach For India Secures $2.5M From Omidyar
Network
Teach For India, a non-profit organisation aiming to eliminate educational
inequity in the country, has raised $2.5 million (Rs 13.4 crore) funding from
Omidyar Network.The monies raised will be used to cover new schools and
expand its operations across new cities in order to accelerate vital
improvements in Indian education system.
Zydus Cadila buys out Biochem Pharmaceuticals
Ahmedabad-based drug maker Zydus Cadila has acquired 100% stake in
Mumbai-based Biochem Pharmaceuticals for an undisclosed amount. The
acquisition will strengthen Zydus's presence in domestic market.The deal is
likely to be valued around Rs 350-400 crore.
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4. TPG Capital To Acquire Over 20% In Public-listed Shriram
Transport
Private equity major TPG Capital is going to acquire direct stake of over 20 per
cent in Chennai-based commercial vehicle financier Shriram Transport
Finance Company (STFC), worth over Rs 2,000 crore. As of September 2011,
Shriram Holdings (Madras) had 41.27 per cent stake in STFC. With this move,
TPG Capital will hold around 20.5 per cent stake in the company while the
promoter Shriram Group will have approximately 21.5 per cent.
Actis buys $71m stake in Endurance
Emerging markets-focussed private equity firm, Actis announced on Thursday
it has made an investment of $71 million in Endurance Technologies, an auto
component manufacturer. Endurance manufactures aluminium die castings,
suspensions, transmissions and brakes with a specific focus on the motorcycle
and scooter market and high end engine and transmission components for
passenger and commercial vehicles.The majority of the company's revenues
come from twowheeler and three-wheeler vehicle manufacturers such as
Bajaj, Yamaha, Suzuki, Honda and Royal Enfield Motors.
ABB bags Rs 4,000 cr order
ABB, a global power and automation technology major, has bagged an order
worth more than Rs 4,000 crore from the Power Grid Corporation of India Ltd
to deliver an ultrahigh-voltage direct current (UHVDC) transmission system.
The link will supply hydropower from the mountainous northeast India to the
populous region of Agra, 1,700 kilometres away.ABB in India will book over
Rs 500 crore of the total order value for local equipment supplies and will
additionally contribute to the project with design and engineering services.
The revenues are expected to start flowing in from the second half of 2012.
“Northeast India has abundant hydro-power resources spread over a large
area while the load centres are often located thousands of kilometres away.
India plans to create pooling points in the region to collect electricity
generated from several hydro-power stations and transport it across power
superhighways to major urban load centres,” ABB said in a statement.
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5. RBI slaps Rs 5 lakh penalty on Gondal Nagrik Sahakari Bank
The Reserve Bank has imposed a penalty of Rs 5 lakh on cooperative sector
lender Gondal Nagrik Sahakari Bank for its failure to adhere to guidelines on
disclosure of loans to directors. Gondal Nagrik Sahakari Bank was also found
guilty of not submitting cash transaction reports to the Financial Intelligence
Unit-India (FIU-IND). The RBI had earlier issued a show-cause notice to the
bank in response to which the bank submitted a written reply.
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