Weekly newsletter

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.
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2. RIL chief MukeshAmbani made some key announcements in the
company’s AGM on Thursday. Ambani announced that his company is
looking at investing Rs. 1 trillion over the next 10 yrs. He also said the
company aims at doubling operating margins in this period.
Interestingly, MukeshAmbani hinted at forming more partnerships, a
strategy which the petrochem major has only employed in recent years.
RIL plans to set up a gas cracker in Jamnagar that will be among the
largest in the world.
India’s battered currency showed signs of improvement during the
week, but couldn’t sustain the recovery. The currency dropped 61 paise
to close at 55.55. During the week, the currency ended trade at 55.36 to
the US dollar, with a gain of 28 paise. On Thursday, it strengthened
further with a gain of 34 paise, at 55.17 against the dollar.
Auto major, Maruti Suzuki announced that it would be adding around
1,900 employees to its workforce this year. These would be mainly
Engineers & members for the management team. The company plans to
invest about Rs25 lacs on a web-based training academy. That would
link the company with its dealers, suppliers and Suzuki group entities in
the country
Ahead of RBI’s mid-quarter review later this month, the country’s
largest lender State Bank of India slashed its fixed deposit rates by
0.25%.The bank last revised its fixed deposit rates in April. The decision
came following RBI’s decision to cut key interest rate between 0. 5 to
0.8% in its annual credit policy.The new rates would be effective from
Friday.
The country’s biggest two-wheeler firm announced its expansion plans
for the next two years. Hero MotoCorp’s CEO Pawan Munjal unveiled
Rs2,575 crores worth of investments. The money will pay for two new
manufacturing plants- one in Rajasthan, the other in Gujarat. It will also
fund a new R&D centre. The expansion is expected to bring total
capacity to 9 million units from the current 6.4 million.Inside The
Story
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3. Inside The Story
Rating company CRISIL to buy UK-based analytics firm
Coalition for $44.8M
Credit Rating Information Services of India Ltd (CRISIL) will acquire
100 per cent equity shares of the UK-based analytics firm Coalition
Development Ltd, along with its subsidiaries, for Rs 250 crore ($44.8
million approx.) in an all-cash deal.“The all-cash transaction has a
maximum payout of £29 million or Rs 250 crore with earn outs over
two years. It will add to CRISIL’s earnings per share from the first year,”
a company statement said.Set up in 2002, Coalition provides analytical
research on market peers, revenue opportunities, overall market size &
conditions and human capital & technology assets. The UK firm mostly
caters to global investment banks and posted revenues of £8 million in
2011.
PE-backed Shriram EPC to raise up to $26.4M; Gets
Bessemer’s Vishal Gupta on board
Engineering procurement & construction firm Shriram EPC, backed by
Bessemer Venture Partners and others, is planning to raise funding up
to $26.4 million (Rs 150 crore).The funding could be done through
rights issue of equity shares or QIPs, ADRs, GDRs, FCCBs or any other
securities convertible into equity shares.According to a BSE filing, the
Company has also appointed Vishal Vijay Gupta of Bessemer Venture
Partners as its nominee director after RS Chandra (also from Bessemer)
Resigned from Shriram EPC’s board.The venture capital firm holds 23.6
per cent in Shriram EPC, as of December 2011. Other investors in the
firm include New Vernon Private Equity, Argonaut Ventures and Ascent
India Fund.
Verizon buys Hughes Tele for $612 mn
US-based Verizon Communications today said it will acquire Hughes
Telematics for USD 612 million which will help to expand capabilities in
automotive and fleet telematics marketplace.The acquisition will also
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4. help Verizon accelerate growth in key vertical segments, including
emerging machine-to-machine (M2M) services applications driven by
consumer trends and increasingly connected lifestyles, Verizon said in a
statement today.New York-headquartered Verizon Communications
delivers broadband and other wireless and wireline communications
services to consumer, business, government and wholesale customers. A
Dow 30 company with USD 111 billion in 2011 revenues, Verizon has a
headcount of nearly 192,000.
News Corp buys ESPN Star Sports stake
News Corporation and ESPN today announced an agreement, under
which a unit of the USD 61 billion global media company will buy the
latter's 50 per cent equity stake in ESPN STAR Sports (ESS).The
transaction will allow News Corporation units to own and operate all of
the ESS businesses while providing ESPN more independence and
flexibility in future support of The Walt Disney Company's overall
efforts in Asia, a media release said. "News Corporation's acquisition of
the interest of ESS that we did not already own, continues the program
of simplifying our operating model, consolidating our affiliate
ownership structures and furthers our commitment to delivering
incredible sports programming to consumers across the globe and
particularly enhancing our position in sports programming in emerging
markets," said James Murdoch, Deputy Chief Operating Officer and
Chairman and CEO International, News Corporation.
Samara Capital invests $32M in Monte Carlo Fashions
Mumbai-based private equity fund Samara Capital has invested Rs 175
crore ($32 million) to acquire 20 per cent stake in Monte Carlo Fashions
Ltd, an apparel manufacturing and retailing company. The funding will
be used to meet working capital requirements and Capex needs. The
current deal values the privately held firm at Rs 875 crore or $160
million. Religare Capital was the advisor for the transaction.
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5. Adanis eyeing up to $1B through stake sale in two group
firms
The Adani Group is eyeing as much as $1 billion through sale of
minority stake in two public-listed group firms. The group, which has
interests in energy, infrastructure and commodities, is looking to sell
around 2.5 per cent stake in Adani Ports & Special Economic Zone and 5
per cent in Adani Enterprises.The group is hoping to complete the
fundraising by June 2013, an unnamed group executive official told
news agency PTI at an investor conference, organised by Morgan
Stanley.Although he did not specify the route through which the group
might be raising funds, it could be through PE funding. Adanis had
earlier raised PE funding for some of the group firms, including Adani
Power where 3i is an investor.The money proposed to be raised would
be used to part-fund $4.2 billion Capex on the Australia coal mine and
creation of associated infrastructure, according to the executive.
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