Weekly Indian Economy Newsletter


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Weekly Indian Economy Newsletter

  1. 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 1
  2. 2. Weekly Executive SummaryIndias food inflation declined slightly to -1.03 per cent for the weekended January 14 as compared to -0.42 per cent for the previous week,staying in negative territory for the fourth straight week, as prices ofessential items such as wheat, vegetables, potatoes and onionsmaintained a downtrend. The inflation rate for fuel, however, remainedunchanged at the previous two weeks level of 14.45 per cent, an officialstatement said here today, quoting provisional data.The Reserve Bank has sent a clear signal rates will be brought down inthe coming months. Indeed, its monetary policy review on Tuesdayemphasized growth rather than controlling inflation. RBI expectsinflation to moderate to the targeted 7% by March--- even as growthfalls to an estimated 7% from the old projection of 7.6%. But while RBIbelieves interest rate cuts can wait, it has moved quickly to inject someliquidity into the system. On Tuesday it cut the cash reserve ratio or CRRby 50 basis points to 5.5%.Moving on, Jet Airways is charting a new route towards reducing itsdebt. The airline plans to sell nine or ten of its Boeing 737s by April. Itthen plans to lease those aircraft back. The move will help it raise Rs666crore. Jet has a debt of nearly Rs14, 000 crore. By leasing back its ownaircraft, it’s following a path that other airlines have also used in thepast to repair their balance sheets. Jet only owns 40 of the 101 planes itoperates.Reliance Industries has set the dates for its planned buyback of some120 million shares. The company said it would start the buyback on 1February and end it on 19 January next year. RIL has set a maximumprice of Rs870 per share and could spend 2.1 billion dollars on thebuyback’s 2
  3. 3. Inside The StoryTemasek to Buy 4.9% In Godrej Consumer For $135MSingapore’s sovereign wealth fund Temasek is investing Rs 685crore($135 million) to buy 4.9 per cent stake in consumer products firmGodrej Consumer Products Ltd, in the single largest alternativeinvestment deal in the Indian FMCG industry.Temasek is investingthrough a preferential allotment, making it the largest institutionalshareholder in Godrej Consumer, the flagship of the $3.4- billion Godrejgroup. The Singapore government’s investment firm is picking up thestake through Baytree Investments (Mauritius) Pte Ltd, an indirectwholly-owned subsidiary. The fresh issue will be made at Rs 410 ashare, a little over 2 per cent premium to the last traded share price ofGodrej Consumer on Friday. The deal would help Godrej Consumerfinance its aggressive inorganic strategy, wherein it has acquired sevencompanies across the world since 2010 and consolidated its holding intwo joint ventures.Ujjivan Raises Rs 29Cr Through NCD IssueBangalore-based microfinance firm Ujjivan Financial Services Pvt Ltdhas raised Rs 29 crore ($5.8 million) through a private placement ofnon-convertible debentures (NCDs). The NCDs were subscribed byDeveloping World Markets (DWM) and listed on the Bombay StockExchange.The transaction comes a little over a year after Ujjivan raisedRs 40 crore through NCD placement with DWM only. The companyfollowed that up with two issues with Standard Chartered Bank totallingRs 55 crore. Ujjivan also raised over Rs 100 crore in debt funding from aset of public and private sector banks, including SIDBI, among others. 3
  4. 4. Strides Arcolab Sells Subsidiary Ascent Pharma to WatsonFor $393MBangalore-based Strides Arcolab Ltd has sold its entire 94 per centholding in Ascent Pharma Health Ltd, its subsidiary operating inAustralia and South-east Asia, to NYSE-listed Watson Pharmaceuticals,Inc., at an enterprise value of AU$375 million ($393 million).Ascent isone of the top five generic pharmaceutical companies in Australia withpresence across several South-east Asian countries like Singaporewhere it is the leading generic pharmaceutical company.As part of thetransaction, Watson also acquired the remaining 6 per centshareholding associated with Dennis Bastas, CEO of Ascent. Thetransaction was signed and closed simultaneously.Zephyr Peacock Invests Up To Rs 50Cr in Gadhia SolarPrivate equity firm Zephyr Peacock has invested up to Rs 50 crore inMumbai-based Gadhia Solar. The solar energy company provides energysolutions by using parabolic concentrated technology and hasimplemented some of the world’s largest solar thermal systems duringthe past two decades.India Infoline Venture Capital Fund Raises Rs 500Cr RealtyFundIndia Infoline Venture Capital Fund, the private equity arm of the IndiaInfoline group (IIFL), has completed raising a Rs 500 crore fund dubbedIIFL Real Estate Fund (Domestic) Series I, according to a companystatement. The fund will mainly focus on the Indian real estate sectorand invest in equity, debt and equity-linked instruments of promisingreal estate and construction companies, which are either involved inprojects/ventures or have significant growth potential. 4
  5. 5. NTT Com to Acquire 74% in Netmagic Solutions; Nexus,Fidelity ExitNTT Communications Corporation (NTT Com), a wholly ownedsubsidiary of Nippon Telegraph and Telephone (NTT) Corporation, willacquire 74 per cent stake in data services firm Netmagic Solutions PvtLtd, the companies have jointly announced on Wednesday. According toTelecompaper, the acquisition price is around 10 billion Japanese yen(around $128 million).The addition of Netmagic Solutions’ datacentreservices and sites will expand NTT Com’s capability to provide one-stopICT solutions in the Indian market and also accelerate its global offeringof seamless Cloud services.US Buyout Firm GenNx360 Opens Offices in Gurgaon,BangaloreUS-based buyout firm GenNx360 Capital Partners has formed GenNx360India Advisors Pvt Ltd, which will now operate out of two offices inGurgaon and Bangalore. Launched in 2006, GenNx360 specializes inmid-market buyouts of industrial B2B companies. The firm focuses onopportunities 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) andbusiness services like logistics. It looks to invest in companies withrevenues between $75 million and $500 million. GenNx360 is based inNew York City, with additional offices in Seattle and Boston. Thisstrategic initiative provides the firm with a truly global footprint,establishing a presence in both India and Asia 5
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