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  • 1. Top Headlines Vedanta Aluminium to acquire L&T’s bauxite mines in Orissa for $330M. Samara Capital invests $32M in Monte Carlo Fashions DLF sells hotel assets to Kolkata-based consortium for $103M Komli Media raises $39M from Norwest Venture Partners, Nexus, Helion & others Zicom acquires 49 per cent in Qatar’s Phoenix International for $15M Jyothy Labs to merge Henkel to consolidate biz Weekly Economic Review The week began on a rather turbulent note for the country’s economy. Credit rating agency, S&P warned India that it could be one of the first BRIC nation to get a downgrade. India might lose its investment grading citing slow GDP & political roadblocks to policy-making. Also the ‘BBB-’ long term sovereign credit rating is currently a notch above speculative grade. In April, S&P had revised country’s credit outlook to negative. But finance minister remained confident about India’s growth story. He dismissed the Standard & Poor’s warning stating that the government is fully aware of the situation and expressed confidence in the country’s economic track record. He added that the S&P report is not based on a fresh rating action. Also, there are no significant events to indicate that India’s vulnerability to shocks has increased, despite slow growth numbers. Here’s sector-wise breakup of the IIP figures. The manufacturing sector grew barely 0.1% as against 5.7% in April 2011. Capital goods output declined by 16.3% against a growth of 6.6% in the same month last year. Mining contracted by 3.1% as compared 1.6% growth in April 2011. On the flipside, consumer durables segment expanded by 5% as 1
  • 2. Against 1.6% last year. These numbers are likely to put pressure on theReserve Bank to cut its lending rate.Inflation figures for May were also released in the week. The overallfood inflation rose to 10.7% from 10.4% in the same period last year.Vegetables inflation was lower at 49.4% in May.After six months of backtracking on plans to allow FDI in retail, majorretail chains are scaling down their operations. After future group gaveaway stake to Aditya Birla in its clothing brand Pantaloons, Aditya Birlashuts 50 of its ‘MORE’ stores. Reliance also shut down 1,300 RelianceFresh stores as it was unable to make money. Experts feel, no decision isexpected before 2014 general elections.Reliance Communications’ undersea cable business has got an approvalfor an IPO on the Singapore stock exchange. With the IPO, RCom couldraise more than $1 bn. This move will help the Anil Ambani-ledcompany to cut some of its debt burden which stands at $7 bn as ofMarch. The company had been trying to raise funds by selling itstelecom assets but has been largely unsuccessful. The company hasn’tspecified any date for the IPO, though insiders say, it could be nextmonth.ONGC is set to invest Rs. 440 crores in drilling 40 oil & gas wells in theKG basin next year. The proposal is currently with the environmentministry for clearances. The wells would be located in east-westGodavari & Krishna district in Andhra Pradesh. According to ONGC,these blocks are estimated to have 1,000 million metric tonnes of oil.ONGC, which has 24 blocks in KG basin, produces approximately 840tonnes of oil per day. 2
  • 3. Inside The StoryVedanta Aluminium to acquire L&T’s bauxite mines inOrissa for $330MLSE-listed Vedanta Resources’ group firm Vedanta Aluminium (VAL)has struck a deal to acquire Raykal Aluminium Company Private Ltd(Raykal) from diversified conglomerate Larsen & Toubro (L&T) for Rs1,811 crore ($330 million) over a period of time in a milestone-basedacquisition, the company has disclosed.In the first leg of the deal, it hasacquired 24.5 per cent of Raykal for Rs 200.7 crore ($36 million).Thisfollows a deal struck in February wherein VAL entered into a tripartiteagreement with L&T and Raykal. L&T holds certain prospecting licensesfor bauxite mines located at Sijmali and Kurumali of Rayagad andKalahandi districts of Orissa. By this agreement the entire bauxiteexcavated from above mines will be available for the use of Raykaland/or Vedanta Aluminium.Samara Capital invests $32M in Monte Carlo FashionsMumbai-based private equity fund Samara Capital has invested Rs 175crore ($32 million) to acquire 20 per cent stake in Monte Carlo FashionsLtd, an apparel manufacturing and retailing company. The funding willBe used to meet working capital requirements and Capex needs.MonteCarlo Fashions is a part of the Punjab-based Nahar Group. Last year, thegroup’s flagship Oswal Woollen Mills hived off this premium apparelBrand into a separate entity to unlock the value of the brand throughIPO and private placement. Monte Carlo was valued at Rs 850 crorewhen it was hived off from the parent. The company said last Novemberthat it was looking to dilute up to 25-30 per cent stake through privateequity and public issue for raising Rs 330-380 crore from PE funds andIPO.The current deal values the privately held firm at Rs 875 crore or$160 million. Religare Capital was the advisor for the transaction. 3
  • 4. DLF sells hotel assets to Kolkata-based consortium for$103MDLF, the largest realtor according to market capitalisation, has finallymanaged to sell off its hotel land parcels to a consortium of developersfrom Kolkata for Rs 567 crore (approx. $103 million). The consortium,including Avani Projects and Square Four Housing & Infrastructure PvtLtd, had been in talks with DLF since December last year to acquire theland parcels totalling 17 acre and spread across four cities.DLF todayannounced to the bourses that the company’s wholly owned subsidiary,DLF Hotel Holdings Ltd, divested its entire shareholding in AdoneHotels and Hospitality Ltd (the company which holds the land parcels)for Rs 567 croreKomli Media raises $39M from Norwest Venture Partners,Nexus, Helion & othersMumbai-based online ad network and audience measurement providerKomli Media India Pvt Ltd has raised $39 million, led by NorwestVenture Partners, with participation from Nexus Venture Partners,Helion Venture Partners, Draper Fisher Jurvetson and WesternTechnology Investment.This is the company’s fourth and largestfinancing till date. And till now, the company has raised a total of $62million.The fund will be used to enhance the company’s core mediaechnology platforms and products, hiring more talents and expand itspresence across the Asia-Pacific market. Other than this, it will also beused to for the recently done acquisition of Admax Network, a South-east Asian digital media networkZicom acquires 49 per cent in Qatar’s PhoenixInternational for $15MSecurity solutions firm Zicom Electronic Security Systems Ltd and itsSingapore-based arm Unisafe Fire Protection has acquired a 49 per centstake in fire security solutions provider Phoenix International WLL for$15 million.Zicom has acquired five per cent stake, while its subsidiaryUnisafe Fire Protection Specialists Singapore Pte has acquired 44 per 4
  • 5. cent stake in Phoenix International, according a filing in the BombayStock Exchange.Jyothy Labs to merge Henkel to consolidate bizConsumer goods company Jyothy Laboratories Ltd is merging HenkelIndia Ltd with itself to consolidate its personal care products businessunder a single umbrella, completing the final leg of its strategicacquisition of the Indian arm of German giant Henkel.Jyothy Labs, whichcurrently owns 83.66 per cent stake in Henkel India, will issue 1 sharefor every eight shares owned in Henkel India. If the same is convertedinto shares or treasury stock of Jyothy Labs, it would be worth Rs 288crore as per current stock market price.But the company has decided tocancel them, which would lead to minimal equity dilution for JyothyLabs. Other shareholders of Henkel India would get cumulatively justaround 2.87 per cent stake worth Rs 55 crore. 5