Weekly newsletter 02 june2012


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Weekly newsletter 02 june2012

  1. 1. Top Headlines PE-backed Azure Power may get $70M from US Exim Bank Former Reliance Trends chiefs lifestyle e-store gets funding from Lightspeed, Helion Essar Ports raises $31M from Antwerp Port Authority Dubai firm to buy BCCLs TimesofMoney Rating company CRISIL to buy UK-based analytics firm Coalition for $44.8M PE-backed Shriram EPC to raise up to $26.4M; Gets Bessemer’s Vishal Gupta on board. Google to make product search a paid service Weekly Executive Summary The big news of the week was the fall in India’s economic growth. New fourth quarter GDP numbers out on Thursday were worse than most expectations. GDP growth for the three months to March was a meager 5.3%. That brings the overall GDP growth for the full fiscal to a mere 6.5%. The poor GDP numbers were caused primarily by a dismal performance from manufacturing. That sector saw a 0.3% contraction for the quarter. Other sectors also fared badly, with electricity growing just 4.9% and construction going up by 4.8%. Agriculture did worse, with a growth of just 1.7%. And the plunge in economic growth has prompted several downgrades of India. Morgan Stanly has cut its GDP forecast to 5.7% from 6.3%. And Standard Chartered has slashed its forecast to 6.2% from 7.1%. The slowdown has also heightened expectations of a rate cut when the Reserve Bank meets on18 June. And in other news, India’s telecom industry could be up for an overhaul. On Thursday the cabinet approved the National Telecom Policy. The new policy will separate licenses from spectrum. And the government 1
  2. 2. Plans to review the Trai Act and retain the policymaking function. Also,the policy authorizes the Department of Telecommunications to finalisethe Unified Licensing Regime.Moving to earnings, Tata Motors has ended a lucrative year with a bang.On Tuesday the company posted bumper earnings for the fourthquarter. Net profit for the three months to March raced ahead 136% to6,234 crores. And revenue climbed 44% to 50,907. Tata Motorsbenefited from a deferment of tax assets. But the company also got aboost thanks to its UK arm, Jaguar Land Rover, which saw robust salesin emerging markets.But despite the impressive volume growth, investors were disappointedwith JLR’s profitability. The unit’s fourth quarter margins fell to lessthan 15% from about 20 in the previous quarter. Inside The StoryPE-backed Azure Power may get $70M from US Exim BankExport-Import Bank of the US may provide long-term finance of Rs395.9 crore ($70.35 million) to solar power producer Azure Power IndiaPvt Ltd for its solar power plant at Nagaur in Rajasthan.The plant is anexpansion of the firm’s existing 5 MW Nagaur photo-voltaic facility, andwill ensure a total output of 40 MW, making it the largest solar powerplant to be developed at a single location under the National SolarMission. The current project started in January this year.“With thisproject, we are committed to working towards meeting the grid parityobjective of the National Solar Mission in India,” said InderpreetWadhwa, CEO of Azure Power.Former Reliance Trends chiefs lifestyle e-store getsfunding from Lightspeed, HelionArun Sirdeshmukh, former chief executive of Reliance Trends, hasteamed up with Darpan Munjal (former CTO of Times Internet Ltd who 2
  3. 3. had also worked at the e-commerce unit of US retail giant Sears) tolaunch an online fashion and lifestyle store called Fashionara. For astarter, Fashionara is offering apparel, footwear and accessories formen, women and kids but it will also foray into other related productcategories.The Bangalore-based startup has also received anundisclosed amount of funding from Helion Venture Partners andLightspeed Venture Partners. Refusing to quote the exact amount,Sirdeshmukh said, “We have got a substantial amount of funding, whichis required to grow and consolidate a strong e-commerce business. WeMay look for a fresh round of funding after 18-24 months.”The moneyraised will be used to scale up the supply chain, logistics, technology-building, branding and marketing. Right now a team of 36, the firm willalso hire to take up the number to 50 by August this year.Essar Ports raises $31M from Antwerp Port AuthorityBelgium’s Port of Antwerp International (PAI), an investing andconsulting arm of Antwerp Port Authority, has invested Rs 175 crore($31 million) in public-listed Essar Ports, one of India’s largest portoperators involved in port and terminal services for liquid, dry bulk,break bulk and general cargo. The investment is done through the issueof GDRs at Rs 100 per share, translating into around 4 per cent stake ofthe diluted equity base.Essar Ports’ scrip declined marginally to close atRs 89.3 a share on the BSE in a weak Mumbai market. The partnership isaimed at technical assistance for port planning and processimprovement besides quality and productivity enhancement. Jan Adam,the CFO of Port of Antwerp, has joined the board of Essar Ports Ltd as anon-executive director.Dubai firm to buy BCCLs TimesofMoneyDubai based Network International LCC, one of the largest of paymentsolutions providers, was set to buy TimesofMoney, the digital paymentservices provider and remittance company of Bennett, Coleman and CoLtd (BCCL), India’s largest media house and popularly known as theTimes group. The talks have been on for a while and the formal 3
  4. 4. Announcement is due within the next fortnight. The business iscurrently valued at around Rs 700 crore and BCCL is exiting at apremium of close to Rs 800-1,000 crore.Rating company CRISIL to buy UK-based analytics firm Coalitionfor $44.8MCredit Rating Information Services of India Ltd (CRISIL) will acquire100 per cent equity shares of the UK-based analytics firm CoalitionDevelopment Ltd, along with its subsidiaries, for Rs 250 crore ($44.8million approx.) in an all-cash deal.“The all-cash transaction has amaximum payout of £29 million or Rs 250 crore with earn outs overtwo years. It will add to CRISIL’s earnings per share from the first year,”a company statement said.PE-backed Shriram EPC to raise up to $26.4M; Gets Bessemer’sVishal Gupta on board.Engineering procurement & construction firm Shriram EPC, backed byBessemer Venture Partners and others, is planning to raise funding upto $26.4 million (Rs 150 crore).The funding could be done throughrights issue of equity shares or QIPs, ADRs, GDRs, FCCBs or any othersecurities convertible into equity shares.According to a BSE filing, thecompany has also appointed Vishal Vijay Gupta of Bessemer VenturePartners as its nominee director after RS Chandra (also from Bessemer)resigned from Shriram EPC’s board.The venture capital firm holds 23.6per cent in Shriram EPC, as of December 2011. Other investors in thefirm include New Vernon Private Equity, Argonaut Ventures and AscentIndia Fund.Google to make product search a paid serviceGoogles free product search would soon be a paid service in the USunder which merchants and retailers will have to pay for listings ofproducts. "We are starting to transition Google Product Search in the USto a purely commercial model built on Product Listing Ads. This new 4
  5. 5. Product discovery experience will be called Google Shopping and thetransition will be complete this fall," Google Shopping Vice President(Product Management) Sameer Samat said in his blog on Thursday. Thenew initiative seen as a step to boost companys revenue will in additionprovide the customers a higher quality shopping experience. 5