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Weekly Finance and Corporate Deals

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Weekly newsletter

  1. 1. Top headlines Sanofi infusing $122M to complete buy-out of Shantha Biotech and further expansion. Avenue Ventures invests $6.5M in Pune-based realtor Vastushodh's project. Carlyle in talks to buy 24% in Medanta for $160M . Piramal Enterprises acquires skincare OTC brand Caladryl in India. Goldman Sachs exits road developer IL&FS Transportation Networks. Carlyle in talks to buy 24% in Medanta for $160M . Elephant Capital part exits Mahindra Forgings with over 50% haircut. Xander Finance invests $32.5 million in Orris Infrastructure's Gurgaon-based project. Vodafone seeks to buy out minority shareholders in India unit for $1.7B Weekly Indian Market Story The Sensex surged to a record on Friday as blue chips rallied on the back of strong foreign buying, in a remarkable turnaround from two months earlier, when the rupee hit record lows and threatened a crisis of confidence. The Sensex has been propelled by foreign inflows of around $3.5 billion since the Federal Reserve unexpectedly delayed tapering of its monetary stimulus. The foreign buying comes despite mixed signals in an economy growing at its slowest in a decade, with analysts seeing new challenges ahead as the central bank raises interest rates to curb stubbornly high inflation. That has made some investors cautious about whether a rally that has sent the index up 21.5 per cent since a yearly low on August 28. can be sustained 1
  2. 2. The Sensex rose as high as 21,293.88 points, a gain of 0.6 per cent for the day, surpassing the previous record of 21,206.77 points on January 10, 2008. It ended Friday up 0.2 per cent.Despite the record high, the Sensex remains Asia's fourth-worst performer this year in dollar terms among the exchanges tracked by Thomson Reuters, with a fall of 2.6 per cent. The returns have been hurt by a weak rupee, which hit a record low of 68.85 in late August, that had sparked concerns about a currency crisis in the country.Those concerns have subsided, thanks to the delay in the Fed tapering and steps to steady the rupee taken by India's new central bank governor Raghuram Rajan. Still, challenges to the broader economy remain. Manufacturing activity contracted for a third straight month in October, data on Friday showed, for example.Signs of weakness are keeping the economic outlook uncertain even as other data show signs of improvement, including a report showing India's infrastructure sector output rising at its fastest in a year. The World Bank last month slashed its growth forecast for Asia's third-largest economy to 4.7 per cent in the year ending March, below the decade low of 5 per cent in the previous fiscal.The Reserve Bank of India also raised interest rates by a quarter per centage point for a second consecutive month in October, to fight accelerating inflation. Indian shares are expensive compared to regional peers, trading at about 14.4 times trailing 12-month earnings compared to 10.6 times for Asian emerging markets, Credit Suisse said.Yet blue chips have been gaining. The Nifty rose 0.1 per cent, also within sight of a record high set on January 8, 2008. State-owned banks gained for a second consecutive session on Friday on hopes of stabilising asset quality, sending State Bank of India Ltd up 5 per cent.Among other lenders, Bank of India rose 5.5 per cent, while Bank of Baroda surged 4.5 per cent.Infrastructure Development Finance Co Ltd shares jumped 6.8 per cent after its September-quarter consolidated net profit beat some analyst expectations. Inside The Story Sanofi infusing $122M to complete buy-out of Shantha Biotech and further expansion. Sanofi Aventis is investing Rs 755 crore to buy out the remaining minority shareholders of Shantha Biotechnics Ltd and fund its further expansion plans.This follows the nod 2
  3. 3. from the Foreign Investment Promotion Board (FIPB), the government authority clearing foreign investment in India, to bring in fresh FDI in the country.Sanofi held 97 per cent in Shantha Biotechnics as of December 31, 2012 with the remaining stake held by employees and other shareholders of the company. Avenue Ventures invests $6.5M in Pune-based realtor Vastushodh's project. Vastushodh Projects, a Pune-based developer has raised close to Rs 20 crore from Mumbai-based Avenue Venture Real Estate Fund. The fund will increase its investment up to Rs 40 crore, said sources privy to the development.The investment is a pure equity one. The fund has previously made six investments and this is its seventh investment though the first one in Pune region. To date the fund has deployed capital in Chennaibased Casa Grande as well as Bangalore-based Assetz Homes and Rohan Builder’s project.To date the fund has deployed capital in Chennai-based Casa Grande, Bangalorebased Assetz Homes and Rohan Builder’s project.The development is a 22-acre project called AnandGram and the money has gone into developing affordable housing project. Carlyle in talks to buy 24% in Medanta for $160M Private equity fund Carlyle will buy 24% stake in Naresh Trehan-founded Medanta Medicity for Rs 950 crore, or $160 million. Carlyle will acquire the shares held by existing investor Avenue Capital. However, a source close to the deal said that the negotiation for the deal had already been completed at the company's net valuation of around $650 million. Avenue Capital is selling its entire 24% to Carlyle. Atul Punj of Punj Lloyd owns around 19% and the rest 57% is held by Dr Trehan. Avenue Capital had acquired the 24% stake in Medanta-Medicity in 2008 for around Rs 170 crore Piramal Enterprises acquires skincare OTC brand Caladryl in India Piramal Enterprises Ltd has acquired over-the-counter dermatology brand Caladryl in India from Valeant Pharmaceuticals Inc, for an undisclosed amount. Caladryl is an antipruritic solution known for known for dermatosis application for minor skin irritations and itching.The global brand was previously owned by Johnson & Johnson. Last year, Valeant acquired the rights for the brand from Johnson & Johnson.Through this acquisition Piramal Enterprises will widen its consumer products portfolio in the skin care segment, the company announced in a press statement.The current consumer products of Piramal Enterprises include Lacto Calamine, Saridon, i-Pill, Itchmosol and Supractiv Complete along with niche market brands like Polycrol, i-Sure, i-Can, Jungle Magic and Tetmosol. 3
  4. 4. Goldman Sachs exits road developer IL&FS Transportation Networks Wall Street giant Goldman Sachs has exited its investment in IL&FS Transportation Networks Ltd with marginal gains. The private equity arm of the bank sold the last chunk of its stake on Thursday for Rs 27.62 crore on the National Stock Exchange.Through GS Strategic Investments Ltd, the firm sold 1.33 per cent stake or around 2.6 million share of the company for Rs 107.95. The shares were picked up by Norway's sovereign wealth fund, Government Pension Fund Global.Scrip of IL&FS Transportation reacted positively, shooting up over 13 per cent in early trade. Shares were trading at Rs 117.45, up by 8.8 per cent at 10:19 am on Friday. Carlyle in talks to buy 24% in Medanta for $160M Private equity fund Carlyle will buy 24% stake in Naresh Trehan-founded Medanta Medicity for Rs 950 crore, or $160 million. Carlyle will acquire the shares held by existing investor Avenue Capital. However, a source close to the deal said that the negotiation for the deal had already been completed at the company's net valuation of around $650 million. Avenue Capital is selling its entire 24% to Carlyle. Atul Punj of Punj Lloyd owns around 19% and the rest 57% is held by Dr Trehan. Avenue Capital had acquired the 24% stake in Medanta-Medicity in 2008 for around Rs 170 crore. Elephant Capital part exits Mahindra Forgings with over 50% haircut. AIM-listed and India-focused private equity firm Elephant Capital has part exited its sixyear-old investment in Mahindra Forgings Ltd by participating in a tender offer by Spanish auto parts supplier CIE Automotive, which is picking a stake in the components business of Mahindras as part of a global deal.The PE firm sold almost two-thirds of its 2.45 per cent stake aggregating 1.74 million shares in Mahindra Forgings for Rs 14.13 crore (approximately £ 1.42 million or $2.3 million) in cash. The offer price was Rs 81 per share, which represented a premium of 21.2 per cent to the closing mid-market price per Mahindra Forgings share of Rs 66.85 on June 15, 2013 (the day preceding the date of the first announcement regarding the proposed offer). Xander Finance invests $32.5 million in Orris Infrastructure's Gurgaon-based project. Xander Finance, the non-banking finance company of the Xander Group Inc, has invested Rs 200 crore in north India-based developer Orris Infrastructure's residential development.The investment has come in for a Gurgaon-based residential project of Orris 4
  5. 5. called Greenopolis, an eco friendly development in Sector 89. The project consists of 2, 3 and 4 BHK apartments and the project is spread across 45 acres. The transaction is a high-yield one. Vodafone seeks to buy out minority shareholders in India unit for $1.7B Vodafone Group Plc has sought approval from the authorities to raise its stake in the India unit for 101.41 billion rupees it said on Tuesday, after India allowed foreign companies to take full ownership of local carriers.Vodafone, which entered India in 2007 by buying Hutchison Whampoa's local cellular assets in an $11 billion deal, directly and indirectly owns a combined 84.5 per cent of Vodafone India, the country's No.2 telecoms company by users.Vodafone directly owns 64.38 per cent of the India unit. 5

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