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Weekly newsletter


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Weekly newsletter

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Weekly newsletter

  1. 1. Top Headlines 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 Verizon buys Hughes Tele for $612 mn. News Corp buys ESPN Star Sports stake Samara Capital invests $32M in Monte Carlo Fashions Adanis eyeing up to $1B through stake sale in two group firms Weekly Economic Review The week started on a positive note with RBI deputy governor Subir Gokarn indicating that there’s now more room to bring down interest rates. According to Gokarn, easing inflation combined with falling crude oil prices will help the situation. On the other hand, he said high food prices, a battered rupee and a large fiscal deficit continued to stoke inflation. Gokarn’s comments come before RBI’s next monetary policy review due this month. Last Govt figures show, growth in India had fallen to just 5.3% of GDP in the quarter ending March 2012. On the other mews Construction firm L and T Infrastructure Development Projects bagged a major contract in Western India. On Wednesday the company won the bids to develop two road projects that will pass through Maharashtra and Gujarat. The projects will cost Rs. 4,800 crores. Special purpose vehicles belonging to L& TIDPL have signed contracts with the National Highways Authority of India. The projects will be on a build-operate-transfer model. 1
  2. 2. RIL chief MukeshAmbani made some key announcements in thecompany’s AGM on Thursday. Ambani announced that his company islooking at investing Rs. 1 trillion over the next 10 yrs. He also said thecompany aims at doubling operating margins in this period.Interestingly, MukeshAmbani hinted at forming more partnerships, astrategy which the petrochem major has only employed in recent years.RIL plans to set up a gas cracker in Jamnagar that will be among thelargest in the world.India’s battered currency showed signs of improvement during theweek, but couldn’t sustain the recovery. The currency dropped 61 paiseto close at 55.55. During the week, the currency ended trade at 55.36 tothe US dollar, with a gain of 28 paise. On Thursday, it strengthenedfurther with a gain of 34 paise, at 55.17 against the dollar.Auto major, Maruti Suzuki announced that it would be adding around1,900 employees to its workforce this year. These would be mainlyEngineers & members for the management team. The company plans toinvest about Rs25 lacs on a web-based training academy. That wouldlink the company with its dealers, suppliers and Suzuki group entities inthe countryAhead of RBI’s mid-quarter review later this month, the country’slargest lender State Bank of India slashed its fixed deposit rates by0.25%.The bank last revised its fixed deposit rates in April. The decisioncame following RBI’s decision to cut key interest rate between 0. 5 to0.8% in its annual credit policy.The new rates would be effective fromFriday.The country’s biggest two-wheeler firm announced its expansion plansfor the next two years. Hero MotoCorp’s CEO Pawan Munjal unveiledRs2,575 crores worth of investments. The money will pay for two newmanufacturing plants- one in Rajasthan, the other in Gujarat. It will alsofund a new R&D centre. The expansion is expected to bring totalcapacity to 9 million units from the current 6.4 million.Inside TheStory 2
  3. 3. Inside The StoryRating company CRISIL to buy UK-based analytics firmCoalition for $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.Set up in 2002, Coalition provides analyticalresearch on market peers, revenue opportunities, overall market size &conditions and human capital & technology assets. The UK firm mostlycaters to global investment banks and posted revenues of £8 million in2011.PE-backed Shriram EPC to raise up to $26.4M; GetsBessemer’s Vishal Gupta on boardEngineering 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.Verizon buys Hughes Tele for $612 mnUS-based Verizon Communications today said it will acquire HughesTelematics for USD 612 million which will help to expand capabilities inautomotive and fleet telematics marketplace.The acquisition will also 3
  4. 4. help Verizon accelerate growth in key vertical segments, includingemerging machine-to-machine (M2M) services applications driven byconsumer trends and increasingly connected lifestyles, Verizon said in astatement today.New York-headquartered Verizon Communicationsdelivers broadband and other wireless and wireline communicationsservices to consumer, business, government and wholesale customers. ADow 30 company with USD 111 billion in 2011 revenues, Verizon has aheadcount of nearly 192,000.News Corp buys ESPN Star Sports stakeNews Corporation and ESPN today announced an agreement, underwhich a unit of the USD 61 billion global media company will buy thelatters 50 per cent equity stake in ESPN STAR Sports (ESS).Thetransaction will allow News Corporation units to own and operate all ofthe ESS businesses while providing ESPN more independence andflexibility in future support of The Walt Disney Companys overallefforts in Asia, a media release said. "News Corporations acquisition ofthe interest of ESS that we did not already own, continues the programof simplifying our operating model, consolidating our affiliateownership structures and furthers our commitment to deliveringincredible sports programming to consumers across the globe andparticularly enhancing our position in sports programming in emergingmarkets," said James Murdoch, Deputy Chief Operating Officer andChairman and CEO International, News Corporation.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. Thecurrent deal values the privately held firm at Rs 875 crore or $160million. Religare Capital was the advisor for the transaction. 4
  5. 5. Adanis eyeing up to $1B through stake sale in two groupfirmsThe Adani Group is eyeing as much as $1 billion through sale ofminority stake in two public-listed group firms. The group, which hasinterests in energy, infrastructure and commodities, is looking to sellaround 2.5 per cent stake in Adani Ports & Special Economic Zone and 5per cent in Adani Enterprises.The group is hoping to complete thefundraising by June 2013, an unnamed group executive official toldnews agency PTI at an investor conference, organised by MorganStanley.Although he did not specify the route through which the groupmight be raising funds, it could be through PE funding. Adanis hadearlier raised PE funding for some of the group firms, including AdaniPower where 3i is an investor.The money proposed to be raised wouldbe used to part-fund $4.2 billion Capex on the Australia coal mine andcreation of associated infrastructure, according to the executive. 5