The document provides summaries of several business news stories: 1) Lightspeed is raising a $675M global fund and appointing an India principal. Morgan Stanley will trim fees and size for its $4.7B property fund. Canaan Partners raises $600M for tech and healthcare investments. 2) Kedaara Capital plans to invest in corporate spin-offs and pursue $75-100M deals. IL&FS invests $38.5M for a 9.4% stake in an IndiaBulls real estate project. PE-backed Dalmia Bharat will acquire up to 50% of Calcom Cement for $46M. 3) IEP is raising

1. Top Headlines
Lightspeed Raising $675M New Global Fund; Appoints
India Principal
Morgan Stanley To Trim Fees, Size Of $4.7b Property
Megafund
Canaan Partners Raises $600M Fund; To Invest In Tech,
Healthcare Cos
Kejriwal's Kedaara Capital To Invest in Spin-offs; Eyes $75-
100M Deals
IL&FS Buys 9.4% In India bulls’ Mumbai Real Estate
Project For $38.5M
PE-backed Dalmia Bharat To Buy Up To 50% In Calcom
Cement For $46M
IEP Raising $500M Fund, Gets Initial Commitment For A
Quarter
RCOM Eyes $1.5B Singapore IPO For Undersea Cable Unit
Red Fort Capital Raises $500M For Second Realty Fund
R-Cap sells 26% stake in MF arm to Nippon Life
Vodafone wins Rs 11000cr tax case in SC
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2. Weekly Executive Summary
Food inflation remained in the negative zone for the third straight week, at (-)
0.42 per cent for the week ended January 7, mainly due to a fall in the prices of
onions and vegetables. Food inflation, as measured by the Wholesale Price
Index (WPI), was at (-) 2.9 per cent in the previous week. It was above 16 per
cent in the corresponding week of 2011.
Investors may not have had great expectations from Reliance Industries this
quarter, but the company still did worse than most estimates. Net profit for
the December quarter dropped 14% to Rs4, 440crore. That was on a growth
in net sales to Rs85, 135crore from Rs59, 789crorein the same period last
year. This is the first time RIL has seen its net profit fall in more than two
years. The company has been hit by a steep 63% rise in raw materials costs.
And the decline of the rupee didn’t help either, since RIL has to import oil for
its refinery in Jamnagar.
And RIL also announced the details of its massive share buyback. It will
purchase its own shares worth up to Rs10, 440crore at a maximum price of
Rs870 per share. The share buyback is seen as both a way to deploy excess
cash and a move that can shore up the firm’s stocks.
In other news, British firm Vodafone has won its massive dispute with India’s
tax department. On Friday the Supreme Court delivered its verdict in the case.
The court ruled that the $11 billion deal between Vodafone and Hutchison
was not taxable. And it called the deal a bona fide structured FDI into India.
Back in 2007, Vodafone had bought Hutchison’s Indian operations through the
sale of a company based in the Cayman Islands.
Switching back to earnings, India’s biggest I-T firm has managed to keep up
with expectations. On Tuesday Tata Consultancy Services posted a 21.8%
sequential jump in net profit for the third quarter. That was on a revenue
increase of 13.5% quarter-on-quarter.
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3. Inside The Story
Light speed Raising $675M New Global Fund; Appoints
India Principal
Light speed Venture Partners, a global venture capital firm, is raising
$675 million for its ninth fund, according to a filing with the U.S.
Securities and Exchange Commission.Lightspeed is an active venture
capital investor in India and currently invests in the country from its
global fund. The VC firm has also boosted its India team by adding Dev
Khare as a Principal. Till recently, Khare was a vice-president with
Menlo Park-based venture capital firm Venrock.The new fund’s target is
around 15 per cent lower than Light speed’s previous fund, which
raised $800 million in 2008. The seventh fund had raised $475 million
and Light speed currently has $2 billion under management.
Morgan Stanley To Trim Fees, Size Of $4.7b Property
Megafund
Investors have approved a year-long extension of a $4.7 billion property
mega fund from Morgan Stanley, a company spokesman told Reuters on
Friday. The spokesman said the investment bank's property asset-
management arm had agreed to a "trimming of fees" in the fund, known
as Morgan Stanley Real Estate Fund VII Global. Morgan Stanley Real
Estate Investing had also agreed to reduce the fund's size by $700
million, the spokesman said, adding that since the fund had not yet
drawn down all the cash from investors, it had agreed to a reduction in
commitments rather than returning cash.The fund's life was due to end
this June, but only 40 percent or about $1.9 billion of the money had
been put to work. The fund will now have until June 2013 to invest the
rest of what is now $4 billion in committed capital.
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4. Canaan Partners Raises $600M Fund; To Invest In Tech,
Healthcare Cos
Silicon Valley-based Canaan Partners have raised a $600 million (Rs
3,198 crore) fund Canaan IX to invest in technology and healthcare
companies. Two-third of the newly raised fund will be used to fund
digital media, Internet, mobile and other technology companies while
the rest is designated for pharmaceutical, medical device and healthcare
investments, the statement adds. Healthcare companies face significant
odds as they advance a promising technology towards FDA and clinical
milestones crucial to a valuable exit, commented Wende Hutton,
General Partner at Canaan Partners.
Kejriwal's Kedaara Capital To Invest in Spin-offs; Eyes $75-
100M Deals
Kedaara Capital, a private equity fund manager set up by Manish
Kejriwal (the former head of Temasek India) and Sunish Sharma
(former managing director of General Atlantic India), will largely focus
on investing in carve-outs or spin-offs of large corporate and involve
more in operational responsibilities.Kedaara is adopting an investing
style much on the lines of international private equity firm Clayton,
Dubilier and Rice (CD&R) with which it has partnered for a $500 million
India-focused fund.While the nature of the partnership between
Kedaara and CD&R is not known, sources added that it would be more
on the lines of a JV. While Kedaara will prove to be an entry point for
CD&R in India, which does not have an on-the-ground presence yet, the
bulge-bracket private equity firm will provide Kedaara with not only a
brand name but also access to Limited Partners (LPs) to help its debut
fundraising. The investors in CD&R include endowments/ foundations,
corporate pension funds, public pension funds, insurance companies
and financial institutions among others.
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5. IL&FS Buys 9.4% In Indiabulls’ Mumbai Real Estate Project
For $38.5M
IL&FS Private Equity has invested Rs 200 crore ($38.5 million) to buy
9.36 per cent stake in India bulls Infraestate Ltd, a wholly owned special
purpose vehicle (SPV) floated by India bulls Real Estate Ltd to develop a
realty project on a parcel of land in Mumbai. The project is being
developed on 8.39 acres of land at Lower Parel Division, Mumbai,
earlier occupied by Bharat Textile Mills. In a stock market disclosure,
India bulls Real Estate said that IL&FS Trust Company Ltd and its group
of investors – namely, IIRF India Realty XXI Ltd and Little Fairy Ltd –
have invested an aggregate of Rs 200 crore through subscription to
equity in IBREL SPV. IL&FS PE is the country’s largest home-grown
private equity firm by assets under management.
PE-backed Dalmia Bharat To Buy Up To 50% In Calcom
Cement For $46M
Actis-backed Dalmia Bharat Enterprises Ltd (DBEL) is expanding its
cement business with its subsidiary Dalmia Cement (Bharat) Ltd,
striking a deal to acquire up to 50 per cent of Kolkata-based Calcom
Cement India Ltd, for an aggregate investment amount of Rs 238 crore
($46 million).Dalmia Bharat’s cement business is separately backed by
private equity giant KKR.The investment for acquiring Calcom Cement
stake would be rolled over in multiple tranches, through a combination
of fresh issue of shares and acquisition of existing shares of the privately
held firm. Calcom is a manufacturer of OPC and PPC cement and is
currently expanding its consolidated cement manufacturing capacity to
2.1 million tons per annum.The deal values Calcom Cement at Rs 576
crore. This translates into a valuation of around Rs 2,743 per tonne
(given its immediate project capacity) or Rs 3,388 a tonne (based on its
initial capacity of 1.7 million tonne). This is about half of the valuation
commanded by the country’s largest cement maker Ultratech and that of
another giant ACC, but around the same valuation level of a few other
small and mid-sized cements firms.
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6. IEP Raising $500M Fund, Gets Initial Commitment For A
Quarter
India Equity Partners (IEP) is raising its second private equity fund with
a target of $500 million and has already received commitments for
around $130 million. In the process, it joins a list of India-focused PE
firms, either raising their maiden funds or follow-on funds with a bigger
corpus. At present, IEP is investing out of its first fund worth $350
million. It has also been chasing investments in companies engaged in
sectors like consumer products, food services, healthcare, education and
consumer finance, as well as logistics and utility services sectors.
RCOM Eyes $1.5B Singapore IPO for Undersea Cable Unit
Telecoms company Reliance Communications is looking to raise up to
$1.5 billion through an initial public offering in Singapore of its
undersea cable unit, two sources with direct knowledge of the matter
said on Wednesday. The debt-laden mobile phone operator, controlled
by billionaire Anil Ambani, plans to sell 75 per cent of the wholly-owned
unit, one source said. The other source said a listing could happen
between July and September. Deutsche Bank (DBKGn.DE) is arranging
the planned share sale.
Red Fort Capital Raises $500M For Second Realty Fund
Red Fort Capital, a private equity real estate fund, has raised $500
million from overseas investors for its second real estate fund focused
on residential properties. Red Fort India Real Estate Fund I raised $375
million in 2007.According to its latest filing with the US regulator earlier
this month, Red Fort India Real Estate Fund II had raised $368.5 million
on a target of $500 million. The amount had been raised from 22
investors, with minimum commitment amount being $10 million. Park
Hill Real Estate Group LLC, which is an affiliate of The Blackstone Group,
is listed as a placement agent for the fund. Park Hill Real Estate also
advised Red Fort on its first fund
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7. R-Cap sells 26% stake in MF arm to Nippon Life
Reliance Capital Asset Management Ltd, the mutual fund arm of the Anil
Ambani-controlled Reliance Group, on Thursday announced a 26%
stake sale to Japan’s Nippon Life Insurance Co. for Rs.1,450 crore.The
transaction will mark the entry of Nippon Life into India’s Rs.6.82
trillion asset management industry.The deal values India’s second
largest fund house at Rs.5,600 crore, or about 6% of its overall assets
under management (AUM). It’s one of the highest valuations for an asset
manager in India in recent times, and the deal comes at a time when the
industry is grappling with sluggish sales amid slowing economic growth
and market volatility.
Vodafone wins Rs 11000cr tax case in SC
The case centred on Vodafone's $11bn acquisition of the Indian assets of
China's Hutchison Telecommunications in 2007.Vodafone said it did not
owe tax on the deal, as the assets were held by a firm based in the
Cayman Islands. In May 2007, Vodafone's Dutch subsidiary acquired a
67% stake in CGP Investments Ltd, a Cayman Islands registered
company which held the Indian telecom assets of Hutchison. It was
presented with a tax demand of 112 billion rupees, currently worth
$2.2bn. The Indian government subsequently sought penalties of up to
100% of the original bill."The court has concluded that Vodafone had no
liability to account for withholding tax on its acquisition of interests in
Hutchison Essar Limited (now Vodafone India Limited) in 2007," the
company said in a statement.
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