Mumbai: Mint brings you your dose of the top deals news, reported from newsrooms across the country
PE firms eye minority stake in Syska LED
US-based private equity firms General Atlantic, Blackstone and TA Associates have evinced interest in Syska LED Lights Pvt. Ltd which plans to sell a significant minority stake, Mint reported citing two people aware of the matter. Promoters of Syska, one of India’s leading LED (light-emitting diode) lighting solutions provider, are seeking to sell 40-49% stake in the company at a valuation of ₹3,500-4,000 crore. The promoters are looking to raise equity capital to deleverage the parent company’s balance sheet. While there is interest from private equity majors, the discussions are at a preliminary stage. The company has appointed Edelweiss as a sole adviser on the transaction. The deal value could be anywhere between ₹1,000-1,500 crore. Syska group had outstanding debt of ₹1,174.64 crore as on 31 March 2018, according to a 30 January note by rating agency Acuité. Its debt-to-equity ratio stood at 2.43 times, the report said. Founded in 2013, the company gets close to three-fourths of its revenue from trading and manufacturing of LED lights and distributing them across the country. Promoted by brothers Rajesh and Govind Uttamchandani, the Pune-based firm also manufactures grooming, personal care products and home wires under the ‘Syska’ brand name.
ONGC shelves plan to sell stake in OPaL
Unable to attract a strategic partner for ONGC Petro Additions Ltd (OPaL), Oil and Natural Gas Corp. has shelved its stake sale plans for the petrochemical unit, Mint reported citing two people aware of the development. OPaL, a joint venture between ONGC (49.4%), GAIL (India) Ltd ( 49.2%) and Gujarat State Petroleum Corp. Ltd (1.4%), has set up a grass root mega petrochemical complex at Dahej, Gujarat. For over four years, ONGC has maintained that it was in talks with Saudi Arabia’s Saudi Basic Industries Corp. (Sabic) and Saudi Aramco for selling a 26% stake in OPaL. “The stake sale process is not going ahead as it did not yield any result. So, for the time being, ONGC has decided to make OPaL a subsidiary," said a banker aware of the development, adding that ONGC will now have to convert its share warrants and debenture into equity. If ONGC converts share warrants worth ₹2,600 crore into equity, its share in the project could rise to 70%. Besides, if it also decides to convert debentures worth ₹7,778 crore into equity, its share could rise to about 93%. After turning OPaL into a subsidiary, ONGC could consider listing it in two years.
Warburg Pincus to raise up to $1.5 billion for first India-focused fund
Private equity firm Warburg Pincus LLC is looking to raise up to $1.5 billion for its first fund targeting deals in India, Reuters reported citing two people familiar with the matter, betting on a surge in investment opportunities in Asia's third-largest economy. Warburg plans finish fundraising on its India-focussed fund, which will target industrial sectors such as financial, manufacturing and consumer, by the first half of next year, said one of the people. Launches of India-focused private equity funds are rare, and big global buyout firms such as KKR & Co Inc, Bain Capital and Blackstone Group Inc typically invest in a country mainly from their regional funds. Private equity-backed deals in India have risen to a record $16.8 billion so far this year, rising up from the previous high of $12.4 billion last year, according to data compiled by Refinitiv. The news of Warburg's India fundraising plan comes as rival KKR is looking to raise a record $15 billion in 2020 for its latest Asia-focussed buyout fund, which will include India investments.
Manchester City owners buy majority stake in Mumbai City FC
English Premier League champions Manchester City's parent company City Football Group bought a majority 65% stake in Indian Super League franchise Mumbai City FC, PTI reported. News of the acquisition was revealed in front of the club's fans by CFG Chief Executive Officer, Ferran Soriano together with chairperson, Football Sports Development Limited and Reliance Foundation, Nita Ambani. The deal with the Pep Guardiola-managed club's group will see Mumbai City FC benefit from its commercial and football know-how, while at the same time delivering a new and exciting element to the CFG global commercial platform. "City Football Group has agreed a deal to acquire a majority stake in its eighth club, Mumbai City FC in the Indian Super League, marking a major move into Indian football," the group said in a statement. Other clubs in the CFG stable include New York City, Melbourne City, Yokohama F. Marinos in Japan, Girona FC in Spain and Sichuan Jiunia in China. Mumbai City FC, who has never won the ISL, host their matches at the Mumbai Football Arena in suburban Andheri.
P&G India sets up ₹200 crore fund to invest in startups focused on sustainability
Procter and Gamble India, the local arm of one of the world’s largest consumer goods companies, has set up a ₹200-crore environmental sustainability fund to offer sustainable solutions, such as plastic-free packaging and environment-friendly logistics services, in partnership with Indian businesses, Mint reported. The announcement is in line with P&G’s global sustainability goals aimed at creating a positive impact on the environment and society. P&G will invest in startups or companies whose sustainable business solutions, spanning logistics, packaging, supply chain, etc., can benefit its consumer goods business. The sustainability fund is an extension of the company’s multimillion-dollar Innovation Sourcing Fund, which was launched last year to invest in Indian startups. So far, P&G has invested ₹200 crore through its Innovation Sourcing Fund. It has collaborated with organizations providing supply chain solutions, raw material and packaging innovations, and productivity ideas.
Sony, TV18 mulling JV to house entertainment operations
Japanese major Sony Corp, which owns Sony Pictures Networks India , is likely to create a new joint venture with Mukesh Ambani’s Reliance Industries-owned TV18 Broadcast, which will house all the entertainment assets of both the companies, The Economic Times reported citing two people with direct knowledge of the development. Sony will own a majority 51% stake in the proposed JV, while TV18 will own the remaining 49%. As part of the deal, the two companies will transfer 100% of SPN, 51% of TV18’s share in Viacom18 (US entertainment conglomerate Viacom Inc owns 49% in Viacom18) and 100% of Jio Studios business to the new entity. While the basic framework for the deal is ready, talks are on with Viacom Inc on structure of the deal. If the deal fructifies, the combined entity will own 63 channels, two video streaming services (Voot and Sony LIV), four film studios and two digital content studios, making it an entertainment behemoth with the largest share of voice among the networks in India.
Amazon’s Future deal gets CCI nod
Competition Commission of India (CCI) has approved Amazon’s proposed acquisition of minority stake in Future Group, paving the way for a closer integration of one of country’s leading retail chain into the Amazon India online marketplace, The Economic Times reported. Amazon and Future Group are now rolling out a joint business plan that will help the Kishore Biyani owned retailer to achieve $1-billion (about ₹7,000 crore) of incremental revenue by 2021, two senior industry executives told ET. Amazon wants to expand its hyperlocal platform, Amazon Now, into newer cities in India riding on the Future Group’s store network and also sell Future Group’s FMCG and fashion private brands through its India e-commerce marketplace, the executives said. The two companies are also exploring possibilities which will allow Amazon Prime and Future Pay customers to avail of common benefits and privileges. In a statement, CCI said it has approved Amazon.com NV Investment Holdings LLC’s plans to acquire 49% of voting and non-voting equity shares in Future Coupons Limited. The proposed ₹1,500 crore deal, in turn, will give Amazon 3.5% stake in Future Retail, the group’s flagship company that runs chains like Big Bazaar and EasyDay. Amazon has the option to become the largest shareholder in Future Retail and can exercise this call option anytime between the third and the 10th year. However, details haven’t yet been announced or notified in the CCI filing. When the deal was structured, the valuation at which Amazon will acquire stake in Future Retail was fixed at ₹600 per share.
Binny Bansal puts $20 million more in insurance co Acko
Flipkart cofounder Binny Bansal is doubling down on insurance technology startup Acko by pumping in an additional $20 million into the company as part of its latest financing round, The Economic Times reported citing people in the know of the development. With the fresh infusion of capital, Bansal’s total investment in the new-age insurance firm will go up to $45 million, making it his largest personal bet on an Indian startup. Acko Technology, which runs Acko General Insurance, is in the process of raising a fresh funding round which is expected to be around $40-42 million in size. The capital raising will also see private equity fund Ascent Capital invest $16 million, as per regulatory filings to the Registrar of Companies. Others like Baring Private Equity Partners India and Ventureast are also likely to participate in the funding round, people close to the matter said. The entire financing, including Bansal’s investment, is domestic capital and subject to regulatory approval.
SBI refuses to fund Patanjali’s Ruchi Soya buyout on its own
Pantajali Ayurved’s attempt to buy out edible oil maker Ruchi Soya under the insolvency and bankruptcy code (IBC) for ₹4,350 crore has ran into a road block as the State Bank of India (SBI) has refused to fund the transaction on its own and demanded that other lenders who also benefit from the deal chip in, too, The Economic Times reported. As much as ₹3,700 crore of the acquisition cost was supposed to have been funded by bank loans with Patanjali infusing ₹600 crore from its own internal accruals, according to the resolution plan submitted by the company in August. Bankers were hoping that SBI, which had the maximum exposure of ₹1,800 crore and hence would benefit the most by the adoption of the resolution plan, would take a disproportionate share and help the deal go through. Now there are doubts being raised on the deal. Patanjali had mostly approached public sector banks for the funding. However, bankers are wary of giving more loans. “SBI cannot force any lender to give loans for this deal. This is a purely a commercial decision and each lender will have to take a call. Gone are the days when all banks use to follow the lead lender and give loans in a consortium. Now everyone takes their own call. Patanjali had to tie up the funding while submitting the bid which they have not done. If this does not work out banks will have to think about invoking the guarantee given by the company," said a public sector banker. Bankers are also wary of funding the home-grown consumer goods company after rating downgrades by rating agencies Care and ICRA in October.