Posts Tagged ‘PE investments’

QIPs Outstripped PE Funding & IPOs in Fund Raising Process ;)

QIP-investments-outpace-PEfunds

Qualified institutional placements (QIPs) have outstripped private equity (PE) funding since January by at least eight times, making it by far the most popular fund-raising route for firms this year.

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QIPs raised at least Rs. 21,209 crore since January this year, while PE funds invested only Rs. 2,574 crore in listed firms.

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QIPs have almost raised more than twice of initial public offerings.

A QIP is a private placement by a listed company of shares or securities convertible to equity with qualified institutional buyers approved by market regulator Securities and Exchange Board of India(SEBI).

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Data from Delhi-based investment bank SMC Capitals Ltd shows another 48 QIPs worth Rs.43,891 crore are in the pipeline.

But analysts do not expect a significant rise in the number of, or funds through, PE deals this year.

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Typically, PE investments take up to six months to complete, whereas a QIP can be done in up to four weeks, making the fund-raising process faster and more reliable since the institutional buyers are selected carefully.

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Also, in a QIP, the institutional buyers rarely seek a seat on the company board, or management control, a common practice in large PE deals.

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Since PE is perceptionally intrusive for promoters, QIP serves as a good alternative.

However this QIP structure is liked by investors and firms as in a QIP the window is shorter and money can be raised quickly.

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While real estate firms typically prefer QIPs for their need of capital at short notice, the companies currently waiting to do QIPs are across sectors, including telecom, entertainment, retail and information technology.

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In line for QIPs are Reliance Communications Ltd, Pyramid Saimira Theatre Ltd, Pantaloon Retail (India) LtdΒ  and few more.

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Some firms, though, have taken both routes for their funding needs.

Historically, PE investments in India have been in the form of private investments in public enterprises, or PIPEs, which also happen to the only firms eligible for QIPs.

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β€œPrivate equity investors have missed the boat,” Jagannadham Thunuguntla, head of SMC Capitals, said in a statement.

Companies that are in the pipeline for QIPs may also look for American depository receipts or global depository receipts for funds, heΒ  added.

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Movers and Shakers of Today’s Market : 22nd AuG,2009 :)

gainers and Losers

MOvers and Shakers

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Here we present you with the data of Top Gainers and Losers in BSE Index and NSE Nifty for today.

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Top Gainers shows the list of stocks that have gained the most (% terms) compared to their last closing prices. πŸ™‚

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Top Losers shows the list of stocks that have lost the most (% terms) compared to their last closing prices.

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1. Top Gainers in Sensex

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Top Gainers Sensex

2. Top Losers in Sensex

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Top Losers Sensex

3. Top Gainers in Nifty

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Top Gainers

4. Top Losers in Nifty

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Top Losers Nifty


Click HERE to view company’s detailed stock quote and company profile.

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Top Gainers shows the list of stocks that have gained the most (% terms) compared to their last closing prices. πŸ™‚

Top Losers shows the list of stocks that have lost the most (% terms) compared to their last closing prices. 😦

Institutional Investors have become more sceptical in committing funds!

Equity Head

Private equity firms are becoming cautious about making fresh investments in India with less funds flowing into this segment as institutional investors have become more skeptical in committing funds without thorough research, experts says.

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The rush for PE investments into India has slowdown a bit at present.

Managers are studying the companies more carefully before making any new investment commitment as of now.

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PE funds investing in India has turned cautious and limited partner or the part owners of funds are raising questions over the intent of the investment owing to the fact that global PE fund dipped to record lows during the second quarter of 2009.

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“Limited partners or institutional investors are increasingly becoming sceptical about their investment decisions and are questioning the intent of the General Partners,” SMC Capitals Equity Head Jagnnadham Thunuguntla said.

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PE funds are now preferring to liquidate their stake asΒ Β  capital market sentiment is improved.

The degree of scepticisim in the Indian Market has reduced to what it was few months back.

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However, with the capital market boom, PE funds are now preferring to exit via open market transactions,” Thunuguntla added.

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However, India is among the few markets wherein the PE firms are still looking at investments in times of downturn, though cautiously.

During second quarter 2009, globally 89 private equity funds reached a final close securing $79.7 billion among them. as per the latest survey.

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“The capital market bounce starting April 2009 has seen several PE (Private Equity) funds selling their investments in the open market.

The recent market bounce has given a fresh breather of life for several PE investments with impressive recovery of losses,” Thunuguntla said.

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Private equity firms are becoming cautious about making fresh investments in India with less funds flowing into this segment as institutional investors have become more sceptical in committing funds without thorough research, experts says.

PE Exits through Bulk & Block Deals: SMC Capitals

SMC Capital Equity Head

According to the SMC Capitals report, the capital market bounce starting April 2009 has seen several PE (Private Equity) funds selling their investments in the open market.

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The PE funds have sold from April 2009 till date, an amount to the tune of about Rs 1531 crore through bulk deals and block deals.

SMC Capitals report on PE funds selling investments :


1. The capital market bounce starting April 2009 has seen several PE (Private Equity) funds selling their investments in the open market.

2. The severe capital market correction of 2008 has resulted into several PIPE (Private Investment into Public Enterprises) investments into listed companies by PE funds, facing huge losses with severe wealth destruction.

3. However, the recent market bounce has given a fresh breather of life for several PE investments with impressive recovery of losses.

The PE funds have sold from April 2009 till date, an amount to the tune of about Rs 1531 crore through bulk deals and block deals.


4. The several prominent exits, either partial or full, by PE funds during this period are such as:

– ChrysCapital sale of their stake in Shriram Transport Company for an amount of about Rs 300 crore.

– Orient Global sale of their stake in India Infoline for an amount of about Rs 250 crore

– Warburg Pincus sale of their stake in Max India for an amount of Rs 246 crore

– TPG sale of their stake in Mahindra & Mahindra Finance for an amount of about Rs 123 crore.

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Also read full report on the attachment:

http://www.moneycontrol.com/news_html_files
/news_attachment/2009/SMS%20report%20on
%20PE%20Exits.pdf

According to the SMC Capitals report, the capital market bounce starting April 2009 has seen several PE (Private Equity) funds selling their investments in the open market. The PE funds have sold from April 2009 till date, an amount to the tune of about Rs 1531 crore through bulk deals and block deals.

PE investments in June quarter touch USD 1.03 bn

PE investments in June quarter touch USD 1.03 bn

PE investments in June quarter touch USD 1.03 bn

Propelled by a recovery in the stock market, private equity investment into the country shot up to 1.03 billion dollars in the June quarter, an increase of 17 per cent sequentially.

The PE firms have invested USD 1.03 billion across 54 deals during the quarter ended June 2009, a 17 per cent surge over the previous quarter, which saw 42 deals worth USD 883.97 million, according to data compiled by SMC Capitals.

“With a recovery in the stock market, PE investors have also regained confidence on the Indian firms and have started putting in money,” SMC Capitals Equity Head Jagannadham Thunuguntla said.

However, on a year-on-year basis, the number of PE deals have nearly halved in volume front and declined 69 per cent in value terms.

The June quarter of 2008 saw 84 PE deals worth USD 3.30 billion. The latest numbers take the total investments in the first six months of 2009 to over USD 1.92 billion (across 96 deals) as against the USD 7.95 billion invested (across 202 deals) during the corresponding period last year, the study indicated.

“Although the pace of investment has increased, PE funds are yet to gain last year’s momentum when the stock market was on a high growth path,” Thunuguntla said.

“Going ahead the PE investments are going to increase in India as the valuations are now at cheaper levels,” he added.

As per report by research firm Venture Intelligence, the single largest investment during Q2 of 2009 was IDFC PE and Oman Investment Fund’s Rs 600 crore commitment to QuippoTelecom.

This was followed by Norwest Venture Fund’s acquisition of 2.1 per cent stake in National Stock Exchange for Rs 250 crore.

In the June quarter, the IT &ITeS sector registered 12 deals worth USD 67 million, followed by healthcare and life sciences (with 6 deals worth USD 129 million) and BFSI (6 deals worth USD 116 million).

Some of the major PE investments made during Q2 of 2009 was Axious Investments’ USD 40 million (about Rs 200 crore) commitment to Quippo Telecom,

followed by Pangea Capital’s acquisition of stake in infrastructure firm Cobol Technologies for USD 30 million (about Rs 150 crore).

Other PE investments made during the quarter include Rs 183 crore investment commitment made by Standard Chartered Private Equity in Mahindra & Mahindra Financial Services and IDFC PE investing USD 45.30 million (about Rs 222 crore) in GMR Energy (Orissa Power Project SPV).