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Weekly Indian Newsletter 24dec2011

Weekly Indian Newsletter 24dec2011

Published in Economy & Finance , Business
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  • 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 StoriesMytrah Energy India Raises Rs 100Cr In Mezzanine FundingHyderabad-based Mytrah Energy India Ltd (MEIL), a wholly owned subsidiaryof London Stock Exchange-listed Mytrah Energy, has raised a fresh tranche ofRs 100 crore ($19 million) in mezzanine funding for a four-year term fromPTC India Financial Services.It is expected that relevant documentation anddrawdown of this tranche will be completed by mid-January of 2012. Mytrah,an independent power producer, owns and operates wind farms in India. Thecompany, formerly known as Caparo Energy Ltd, changed its name to Mytrahin September 2011. Mytrah has secured new senior loan funding of Rs 960crore ($192 million), comprising Rs 600 million ($120 million) underwrittenby IDFC and Rs 360 crore ($72 million), which is at an advanced stage ofsyndication. 1
  • 2. Britannia merges dairy & biscuits sales teamsBritannia Industries has merged the sales team of its dairy portfolio with thatof the more established biscuits business to tap new towns and achievegreater bargaining clout with retailers. Rivals see it as a move to cut costswhen margins are under pressure. The Wadia Group company has also startedusing cycle-rickshaws to sell bread in Delhi neighbourhoods as part of a driveto increase the reach and speed of marketing.This moves helps to improveprofitability of the countrys leading biscuit marketer, with a 31.7% valueshare. Britannia posted a net profit margin of 2.9% in the quarter endedSeptember due to high cost of raw materials such as milk and cashew nuts.Mukesh Ambani in talks to buy Network 18Mukesh Ambani, the chairman of Reliance Industries, Indias biggestconglomerate, is in talks to buy Network 18, the television and internetcompany, the Wall Street Journal said quoting people familiar with thesituation. Ambani, the paper said, has been in talks with Network 18 founderand controlling shareholder Raghav Bahl on the issue. Network18 Media andInvestments, the holding company for the conglomerate, has annual revenueof about $300 million but isnt profitableRedington to acquire 25.97% stake in overseas armRedington (India) Ltd will acquire 25.97 per cent stake of its overseasbusiness holding arm Redington International Holding Ltd from private equityfund Investcorp for $113 million. Currently, Redington India owns 69.94 percent stake in the Cayman Island-based arm through a 100 per cent whollyowned Redington International Mauritius Ltd. Through the transactionRedington Indias ownership in Redington International will increase to 95.56per cent, and the balance will be held by the companys employees. 2
  • 3. Everstone Capital Buys 45% In Pind BalluchiEverstone Capital, a private equity firm managing assets worth over $1.5billion in India, is acquiring 45% stake in New Delhi based restaurant chainPind Balluchi, as financial investors continue to show big appetite for thedomestic food and beverage story. Everstone will invest about $20 million inJS Hospitality Services, which operates about 30 Pind Balluchi restaurants,mostly in the National Capital Region, serving north Indian cuisine.Shriram Capital To Buyback Sanlam StakeShriram Capital plans to buy back 26 per cent shareholding held by its SouthAfrican partner Sanlam group in their two insurance joint ventures in India —Shriram Life Insurance and Shriram General Insurance — to comply with thesectoral limits on foreign direct investment in the insurance sector imposedby the Indian government. Shriram Capital is the holding company of the Rs30,000 crore Shriram groups financial services business.Not-for-profit Teach For India Secures $2.5M From OmidyarNetworkTeach For India, a non-profit organisation aiming to eliminate educationalinequity in the country, has raised $2.5 million (Rs 13.4 crore) funding fromOmidyar Network.The monies raised will be used to cover new schools andexpand its operations across new cities in order to accelerate vitalimprovements in Indian education system.Zydus Cadila buys out Biochem PharmaceuticalsAhmedabad-based drug maker Zydus Cadila has acquired 100% stake inMumbai-based Biochem Pharmaceuticals for an undisclosed amount. Theacquisition will strengthen Zyduss presence in domestic market.The deal islikely to be valued around Rs 350-400 crore. 3
  • 4. TPG Capital To Acquire Over 20% In Public-listed ShriramTransportPrivate equity major TPG Capital is going to acquire direct stake of over 20 percent in Chennai-based commercial vehicle financier Shriram TransportFinance 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 thepromoter Shriram Group will have approximately 21.5 per cent.Actis buys $71m stake in EnduranceEmerging markets-focussed private equity firm, Actis announced on Thursdayit has made an investment of $71 million in Endurance Technologies, an autocomponent manufacturer. Endurance manufactures aluminium die castings,suspensions, transmissions and brakes with a specific focus on the motorcycleand scooter market and high end engine and transmission components forpassenger and commercial vehicles.The majority of the companys revenuescome from twowheeler and three-wheeler vehicle manufacturers such asBajaj, Yamaha, Suzuki, Honda and Royal Enfield Motors.ABB bags Rs 4,000 cr orderABB, a global power and automation technology major, has bagged an orderworth more than Rs 4,000 crore from the Power Grid Corporation of India Ltdto deliver an ultrahigh-voltage direct current (UHVDC) transmission system.The link will supply hydropower from the mountainous northeast India to thepopulous region of Agra, 1,700 kilometres away.ABB in India will book overRs 500 crore of the total order value for local equipment supplies and willadditionally 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 largearea while the load centres are often located thousands of kilometres away.India plans to create pooling points in the region to collect electricitygenerated from several hydro-power stations and transport it across powersuperhighways to major urban load centres,” ABB said in a statement. 4
  • 5. RBI slaps Rs 5 lakh penalty on Gondal Nagrik Sahakari BankThe Reserve Bank has imposed a penalty of Rs 5 lakh on cooperative sectorlender Gondal Nagrik Sahakari Bank for its failure to adhere to guidelines ondisclosure of loans to directors. Gondal Nagrik Sahakari Bank was also foundguilty of not submitting cash transaction reports to the Financial IntelligenceUnit-India (FIU-IND). The RBI had earlier issued a show-cause notice to thebank in response to which the bank submitted a written reply. 5