1. Top Headlines
 Crompton Greaves acquires smart grid automation
firm ZIV Group for $185M
 Ambit Pragma acquires 74% stake in Mumbai-
based frozen food logistics firm
 Bus ticketing portal TicketGoose raises Rs 4.5Cr
angel funding.
 Mumbai-based Edubridge Learning secures Rs 1.5Cr
from Acumen Fund.
 Oman India Joint Investment Fund to invest $13M in
Solar Industries
 Educomp Solutions raises $155 million to redeem
foreign currency convertible bonds
 Future bags 54% Deccan Chronicle stake.
 Sify sells stake in MF Global Sify Securities India for
$25M
Executive Summary
It was a disappointing week for anyone looking for a rate cut. The
Reserve Bank decided not to loosen its monetary stance during its latest
review on Tuesday. This is the second straight time in which RBI has
abstained from major cuts. Governor D. Subbarao said reducing policy
rates would only worsen inflationary pressures without spurring
growth. RBI’s actions effectively put the onus for controlling inflation on
the government. At present, the repo rate stands at 8%. And the cash
reserve ratio remains at 4.75%.
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2. Though largely considered as a symbolic move, RBI slashed the
statutory liquidity ratio or SLR. It’s down one percentage point to 23%.
SLR represents the amount of sovereign bonds banks need to hold. The
reduction is unlikely to make much of a difference as the ratio of
holdings for most Indian banks is much higher than 23%.
There are also indications that RBI expects the fight against inflation to
be long and difficult. It has increased its inflation forecast for the fiscal
to 7% from the earlier 6.5%. RBI has also brought its growth forecast
down to 6.5% from 7.3%.
While economic prospects still look poor, there’s a new man at the helm
of the finance ministry. P. Chidambaram is returning for his third stint
as finance minister. His appointment has boosted hopes of a revival in
reforms. The new cabinet announcement coincided with large swathes
of India being left without electricity for hours on Monday and Tuesday,
as power grids collapsed. Some three hundred million Indians were left
without electricity in the early hours of Monday after a power grid
failure at around 2:30 am. Essential services like the railways were only
restored by 8 am.
Everything seemed to be back to normal on Tuesday, but not for long. At
about 1:05 pm, electric supplies broke down across much of north and
east of the country. This time 12 states ranging from Assam to Rajasthan
were blacked out- and some 700 million people were affected. In Delhi,
the metro stopped services, forcing crowds of commuters out onto the
streets looking for other modes of transport. Power was eventually
restored to railway lines and major cities by Tuesday evening. While the
immediate cause of the failures is thought to be overdrawing by some
other states, India’s power utilities have long been struggling with low
capacity, antiquated grids and chronic fuel shortages.
Some observers have pointed out that a poor monsoon may have caused
the overdrawing of electricity, because farmers were using their water
pumps more often. And going by the met department’s latest forecast,
those pumps are likely to remain busy. On Thursday the Indian
Meteorological Department said monsoon rains were expected to be
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3. Below 90% of the normal level this year. The projection effectively
means India is facing a drought, possibly the worst in a decade.
It’s been a good week for India’s struggling airline industry. Two major
private airlines reported better than expected first quarter earnings. On
Friday, the country’s biggest carrier Jet Airways posted a profit of Rs25
crore compared to a loss of Rs123 crore in the same period last year.
Earlier, smaller rival SpiceJet had reported a profit of Rs56 crore
compared to a loss of Rs72 crore. Both airlines have broken a losing
streak of five quarters with their latest results. They’ve benefitted from
the troubles of Kingfisher and Air India, which have had to scale back
their operations in recent months.
Inside The Story
Crompton Greaves acquires smart grid automation
firm ZIV Group for $185M
Crompton Greaves Ltd, the flagship company of Gautam Thapar-
promoted Avantha Group, has acquired Spain’s ZIV Group for an
enterprise valuation of €150 million ($185 million or Rs 1,015 crore) in
yet another overseas acquisition of the capital goods maker.This
acquisition expands the company’s portfolio for power system
automation and protection, and will create a strong platform for the
firm in the smart grid arena, as per a BSE filing.Set up in July 1993, ZIV
Group focuses on smart grid and automatic solutions, and manufactures
digital equipment and systems for industrial and utilities companies. It
operates across 50-plus countries with key operations in Brazil (Rio de
Janeiro), India (Bangalore), Spain (Barcelona, Bilbao, Madrid) and the
US (Chicago). The company has installed more than 1.4 million
intelligent electrical devices (IEDs) for utilities and industries across the
world.
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4. Ambit Pragma acquires 74% stake in Mumbai-based
frozen food logistics firm
Private equity investor Ambit Pragma Ventures has acquired 74% stake
in Mehta Frozen Foods Carrier Pvt Ltd for an undisclosed amount, in a
small-mid market buyout deal.Mehta Frozen Foods Carrier is involved
in transportation of frozen food products like ice-cream, yeast,
floriculture, medicines, meat products and dairy products. The firm,
which started its business with four trucks, has now grown it to sixty 11
feet to 40 feet trucks with a container capacity of 3-26 tonnes.Started in
1996, Mehta frozen Foods is a MRL Group company, headed by Mansur
Mehta -- a third generation member of the group whose core business
revolves around transport.The investment was made through the $150
million Ambit Pragma Fund II. This is a small cap buyout and growth
capital fund, focusing on five high growth sectors such as entertainment,
healthcare, FMCG, logistics and infrastructure services. The average
investment size is $15 million in companies with revenues between $ 5-
15 million.
Bus ticketing portal TicketGoose raises Rs 4.5Cr angel
funding
Bus ticketing portal TicketGoose.com, run by Chennai-based Efficsys
Infotech India Pvt Ltd, has raised $800,000 (approx. Rs 4.5 crore) from
unnamed US-based angel investors. The funding will enable the
company to strengthen its B2B positioning and help streamline its
customer acquisition plans for B2C offering, according to a
statement.Set up in 2007 by Karthi Easwaramoorthy, Arun Athiappan
and Vasu Ramasamy, TicketGoose offers online booking facility, as well
as information on pricing and availability, and covers around 4,500
destinations across southern India. The company posted a turnover of
around Rs 50 crore in FY12 and is targeting Rs 125 crore for FY13
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5. Mumbai-based Edubridge Learning secures Rs 1.5Cr
from Acumen Fund.
Acumen Fund, a non-profit global venture fund which focuses on
poverty alleviation across Africa and South Asia, has put in Rs 1.5 crore
($300,000) in Mumbai-based education services provider Edubridge
Learning Pvt Ltd. Although based in Mumbai, Edubridge provides
vocational training for low-income youth across Maharashtra, Tamil
Nadu, Karnataka and Chhattisgarh.The investment is part of Acumen
Fund’s education portfolio, which aims to support private sector
initiatives that increase access to low-cost, high-quality learning and
employability services for the poor.
Oman India Joint Investment Fund to invest $13M in
Solar Industries
Industrial explosives maker Solar Industries India Ltd (SIIL) has struck
a deal to raise Rs 72 crore ($13 million) from Oman India Joint
Investment Fund through a preferential allotment. Oman India Joint
Investment Fund, a private equity fund sponsored by Oman’s sovereign
wealth fund and India’s largest lender State Bank of India, will pick up
4.28 per cent of the expanded capital of the public-listed Solar
Industries.The investment firm will subscribe to 7,74,195 equity shares
of Solar Industries at Rs 930 a unit, marginally higher than the closing
price of Rs 927.65 a share on Monday. Solar Industries scrip has risen
40 per cent over the past seven months and hit a new high of Rs 955 a
share on Tuesday before paring some of the gains. Currently, the firm is
valued at Rs 1,614 crore.
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6. Educomp Solutions raises $155 million to redeem foreign
currency convertible bonds
Education services provider Educomp Solutions has raised around $155
million (Rs 856 crore) through a mix of debt and equity from investors
like International Finance Corporation, Proparco, Mount Kellett and
promoters. The fund will be used to redeem foreign currency
convertible bonds (FCCBs) worth around $111 million (Rs 613 crore)
and the balance will be deployed to meet the company's capital
expenditure and strengthen its balance sheet.
Future bags 54% Deccan Chronicle stake
Deccan Chronicle Holdings Ltd, which owns English daily Deccan
Chronicle, today said its promoters have pledged their majority of
shareholding to Future Capital. In a filing with bourses, Deccan
Chronicle Holdings Ltd said its promoters - T Venkattram Reddy, T
Vinayak Ravi Reddy and PK Iyer - together have pledged 54 per cent of
their holding (11,28,51,000 shares) in the company on July 26. While
the company did not elaborate on the financial details of the transaction,
based on the closing share price of Rs 22.9 apiece on July 26 at BSE, the
promoters are estimated to have raised Rs 258.43 crore.
Sify sells stake in MF Global Sify Securities India for
$25M
NASDAQ-listed Indian Internet and IT firm Sify Technologies Ltd said it
has completed the sale of its entire stake in MF Global Sify Securities
India Pvt Ltd for Rs 139 crore ($25 million) in cash.The firm had
announced it is selling the stake in March this year, but had not
disclosed the deal value. The firm said it has now received regulatory
and statutory ‘no objection approvals’.It had struck the deal to sell off its
stake in MF Global Sify Securities India Pvt Ltd in an all-cash deal to
Singapore-based financial services company, PhillipCapital Group.Sify
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7. held 29.85 per cent of stake in the joint venture with MF Global, which is
engaged in providing online and offline equity and derivatives trading
for retail clients, besides other clearing services for financial
institutions.
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