PE exits through public markets rise

PE exits through public markets rise

Mumbai: As Indian stocks continue to hit new highs, some private equity (PE) funds are locking in returns by selling their investments in publicly traded companies.

On Wednesday, US-based private equity firm General Atlantic LLC’s arm GA Global Investments, sold 6.5 million shares of IndusInd Bank Ltd for Rs.397 crore. It owned 4.83% stake in the bank, which has now come down to 3.59%.

 

 

General Atlantic is one among many funds that has used the market rally to sell part of their listed investments. According to JM Financial data research, PE funds have sold $1.18 billion worth of investments through public market transactions between January and August this year. This is 75% of the total exits by PE funds so far this year. Over the same period last year, only 20% of total exits happened through the public markets, adding up to roughly $580 million.

 

“Market exits have increased substantially and private equity funds have managed to exit through this route effectively. We expect more exits to happen through the year and the numbers will go up substantially, especially for companies that are listed and where investors are making returns,” said

 Bhavesh Shah, managing director-investment banking at JM Financial Institutional Securities Ltd.

 

On 17 July, First Carlyle Growth VI, the investment entity through which US-based PE firm Carlyle Group had invested in Repco Home Finance Ltd sold its entire stake in the company. It sold nearly 10 million shares for Rs.465 crore. It started exiting the investment last year and has sold its holding in the company for Rs.664 crore on its investment of Rs.108 crore. This worked out to an internal rate of return (IRR) of 38.4% on the investment, according to a person directly involved in the transaction. Carlyle has sold Rs.500 crore in investments through public market exits this year.

 

 

Large PE funds such as Bain Capital, Baring Private Equity Partners India, Saif Partners, Multiples Alternate Asset Management Pvt. Ltd, ChrysCapital Management Co. and others have also sold part of their investments.

 

The largest of these was Bain Capital’s sale of 4.29% stake in Hero MotoCorp Ltd for Rs.1,481 crore, according to a Mint report dated 13 June. Baring India also sold 0.77% in Bangalore-based software services exporter Mphasis Ltd in the June quarter for an undisclosed sum.

 

“The capital market buoyancy will enable funds to exit from their investments. Markets had been depressed for last two-three years and funds now have the opportunity to monetize their investments and return capital to investors” said Keshav Misra, partner and head of investments at Baring Private Equity Partners India. Baring has investments in Muthoot Finance Ltd, Manappuram Finance Ltd , Vardhman Holdings Ltd and TD Power Systems Ltd.

 

“We do have public market exposure and exits are a continuous process and we would be open to mark some exits if we see the price and value is correct,” said Misra.

According to Sanjeev Krishan, executive director and leader-private equity and transaction services at PricewaterhouseCoopers Pvt. Ltd, public market exits will continue as valuations improve.

“If their own assessment of valuations of the company indicates that the underlining company performance is lower than its current valuations they find it a better decision to exit these shares,” said Krishan.

Since the beginning of this year, BSE’s benchmark Sensex has gained 27.94%. On Thursday, it fell 0.20% to close at 27,085.93 points

 

 

md. aquil alam

pgdm 3rd semester

iimt college of management

source.live mint

Sensex at record highs, but buy selectively, say analysts 

MUMBAI: The Sensex snapped a nine-day roll at all-time highs on Thursday as traders and investors paused to book profits or take a reality check on the wave of optimism sweeping stock markets. The benchmark index ended marginally down by 0.2%. Analysts said the time was still fine to invest in equities but advised selective buying at dip, with an investment horizon of at least six months.
Experts trained their eyes on earnings prospects and valuations amid the cheer spread by expectations of an economic rebound and pro-growth policies from the 100-day-old Modi government.
On Thursday, the BSE benchmark index closed at 27,085.93, down 54 points, or 0.2% and the broader NSE Nifty fell 18.65 points to close at 8,095.95.
The Sensex has gained 28% so far this year. It has in fact surged 5.3% in the past one month.

“At the peak of January 2008, the Nifty was valued at 28 times its price-to-earnings ratio. Right now, it is only 19-20 times. So there is still a lot of room for money to be made, if the investment perspective is 6 months to 1-2 years,” said Rahul Shah, vice-president, equity advisory group, Motilal Oswal Securities.
Experts also said that improving macro-economic indicators, a pick-up in auto sales and the government’s push to infrastructure projects will continue to drive markets higher.
“Minor corrections can’t be ruled out due to the recent rally. But overall, we remain positive on the markets given the improving economic conditions. One should invest for a minimum 6-month timeframe. We are bullish on the auto sector,” said Sanjeev Zarbade, vice-president, private client group research, Kotak Securities.
Motilal Oswal expects the Sensex to hit 30,000 by December, and is bullish on stocks in the oil and gas, software services, private banks and non-banking financial services sectors.
Among foreign brokerages, Nomura has raised its Sensex target to 30,310 by August 2015 while Deutsche Bank has set a milestone of 28,000 for the index by December.

Previous StoryNext Story

NAME- RAJ GAURAV

               PGDM 3 SEM

Tata Motors rallies on order win under JNNURM scheme

NEW DELHI: Tata Motors
LtdBSE 1.49 % rallied as much as
2.6 per cent in trade on Wednesday, after the automobile major received orders
for over 2,700 'urban' buses under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) - II
scheme.

At 09:30 a.m.; Tata Motors was trading 1.6 per cent higher at Rs
524.95. It hit a low of Rs 523.15 and a high of Rs 530.50 in trade
today.

The company had received an order from KSRTC (Karnataka State Road
Transport Corporation) .

to supply 487 buses and another for 780 buses from HRTC (Himachal Road
Transport Corporation) for Tata Marcopolo built buses as per Urban Bus Specifications
under JNNURM - II
scheme, Tata Motors said in a statement

 

.

These orders are part of the over 2,700 orders for Tata Motors buses received
under the scheme, it added.

Morgan Stanley upgradeed the stock to
"overweight" from "equal-weight." The Bank cited Tata Motor's "attractive"
relative valuations and optimism about margins and volumes.

Standard and
Poor's raised its outlook to "positive" from "stable." Credit agency cited
stronger performance of Tata unit Jaguar Land Rover.

Jefferies also
raised its rating on the stock ..

on the stock to "buy" from "hold".

 

sourc.  the economics times

md.aquil alam

pgdm 3rd semester

iimt college of management

 

 

United Bank declares Mallya wilful defaulter

Kolkata-based United Bank of India (UBI) on Monday declared UB Group chairman Vijay Mallya, his grounded airline Kingfisher Airlines (KFA) and three directors on its board, Ravi Nedungadi, Anil Kumar Ganguly and Subash Gupte wilful defaulters. UBI is the first lender to have taken this step.

Advertisement

D Narang, UBI executive director who heads GRC, said: “Kingfisher, Mallya and three directors on the board have been declared wilful defaulters.”
Following this declaration, banks are likely to stop funding any company that has Mallya and his colleagues on their boards. They may also have to step down from all companies in which they are directors. UBI can also initiate criminal proceedings against them.

Mallya is chairman of UB Holdings, the holding company of the UB Group, United Spirits, United Breweries, Shaw Wallace, Mangalore Chemicals & Fertilizers, besides a host of smaller UB Group companies. He is also chairman of Bayer Cropscience, the Indian arm of the German MNC.
No executive from the company showed up for a scheduled meeting with UBI’s Grievance Redressal Committee (GRC) at 10.30 am on Monday, forcing the bank to take this step.
HT had first reported on May 30, 2014 that UBI had initiated the process of declaring Mallya and his airline wilful defaulters.
KFA and its directors “intend to pursue all available legal remedies, including an appeal before the Supreme Court of India”, KFA said in a statement.
Reserve Bank of India (RBI) guidelines define a wilful defaulter as a company or individual who does not repay a loan despite having the capacity to do so or diverts borrowed funds for purposes not envisaged in the agreement with the lender.
The airline owes UBI about Rs. 350 crore. A consortium of 17 public and private sector banks, including State Bank of India, Punjab National Bank and IDBI Bank, among others, have outstanding loans of over Rs. 4,000 crore to the grounded carrier. Many of them have also initiated the process of declaring the grounded carrier and its directors as wilful defaulters.
Last week, the Calcutta high court had dismissed a plea by Mallya and KFA to be represented before the GRC by lawyers. The bank had wanted either Mallya or one of his senior executives to be present.
UBI will now inform the finance ministry, the RBI and the Securities Exchange Board of India about its d

                              Mithilesh Chaubey

                    PGDM 3rd sem

Sensex kisses 27,000 as foreign inflows, CAD data trigger rally  

The BSE benchmark Sensex on Tuesday crossed 27,000 for the first time in history and the NSE Nifty breached the pasycho-logical 8,000 mark on continued inflows by foreign funds buoyed by improving economic data.
After rising to a record 27,019.39 during intra-day trade, the Sensex closed up 151.84 points, or 0.6%, to end at a lifetime closing high of 27,019.39.
The Nifty gained 55.35 points, or 0.7%, to close at 8,083.05. Earlier in the session, it scaled 8,100 for the first time to hit a new high of 8,101.95.

Riding high on the rally, financial services major Morgan Stanley has upgraded its June 2015 target for the Sensex to 28,800.
“The sentiment has been very positive as investors are buying into the India story, which has seen some encouraging signs such as improved GDP growth, likely funding support from Japan and softening of crude prices,” said Sanjeev Zarbade, vice-president, private client group research, Kotak Securities.
Cipla was the top gainer among Sensex stocks (up 5.23%) followed by Bharti Airtel (up 4.24%) and Sun Pharma (up 2.50%).
“With steady US bond yields despite ongoing taper and most other central banks in easing mode, the global liquidity is strong and is looking for better investment avenues in emerging markets. With domestic fundamentals on an improving trend, India is well positioned to receive global flows,” said Harsha Upadhyaya, chief investment officer, equity, Kotak Mutual Fund.

NAME-RAJ GAURAV

              PGDM 3 SEM

 

Sensex hits new record-high of 27,148.90; Nifty at 8,119.80

MUMBAI:Continuing its rising streak for the ninth straight session, the benchmark BSE sensex rose over 129 points to hit a new high of 27,148.90 in opening trade today on sustained foreign capital inflows coupled with a firming trend on other Asian bourses.

The 30-share index, which had gained over 705 points in the previous eight sessions, gathered another 129.51 points, or 0.47%, to trade at a new peak of 27,148.90, surpassing its earlier record of 27,082.85 touched yesterday (intra-day).

All the sectoral indices, led by tech, consumer durables, infrastructure and oil & gas, were trading in positive territory with gains up to 0.93%.

Maintaining its record-breaking spree, the NSE nifty also shot up by another 36.75 points, or 0.45%, to hit a fresh life-time high of 8,119.80, crossing its previous record of 8,101.95 hit yesterday.

Brokers said sentiments remained buoyant with key indices soaring to new highs on sustained foreign capital inflows and widespread buying by retail investors, driven by positive economic data such as better-than-expected GDP growth in first quarter and narrowing CAD.

Besides, positive global factors with crude oil prices falling to multi-month lows and a firming trend on other Asian markets boosted investor sentiments, they said.

Among other Asian markets, Japan's Nikkei rose 0.82%, while Hong Kong's Hang Seng gained 0.15% in early trade today.

The US Dow Jones Industrial Average, however, closed 0.18% lower in yesterday's trade.  

 

 Anand maurya

pgdm-3 sem

 

No wealth tax for seven years for returning NRIs This exemption is with respect to money and value of assets brought into India

I am a non-resident Indian (NRI) living in the US. I plan to invest in fixed deposits (FDs) through my NRI account in India. Will it attract income tax on interest and principal? What is the tax structure? I was told that for seven years, I will get tax rebate on the principal and interest earned. Is that true? Say, I split the income among my family members
 when investing, will it help?






—Prakash Assuming that you are a non-resident for Indian tax purposes, any income that is received by you in India or is deemed to be received or any income that accrues or arises to you in India or is deemed to accrue or arise in India will be taxable in India. Income earned and received outside India would not be taxable in India. Consequently, the principal portion of the investment would not be taxable in India. However, the interest income arising from the investments made into such accounts would be taxable on the basis of the residential status of the investor at the time of receipt of the income and also on the type of account maintained. 

If you have maintained a non-resident ordinary rupee account, then the interest income earned from investment in FDs would be taxable in India. However, if you hold a non-resident external rupee account, then the interest income arising from such account would be exempt from taxes in India. Interest income earned from deposits maintained in foreign currency non-resident account is exempt from tax up to such period you are a non-resident or a resident but not ordinarily resident. Any money and value of assets brought into India by a person of Indian origin or a citizen of India who was ordinarily residing in a foreign country and who on leaving such country has returned to India with the intention of permanently residing in India is exempt for wealth tax purposes for a period of seven successive assessment years. This exemption is with respect to money and value of assets brought into India and would be available only when non-resident returns to India. 

The exemption is provided from a wealth tax perspective and does not extend to income earned from the assets brought into India. You could consider distributing your income to your family members. However, by virtue of clubbing provisions under the income tax laws in India, there could be a possibility of such income being clubbed and taxed in your hands. As clubbing provisions would have to be examined individually based on facts, you could consider approaching a tax adviser with specific facts. Queries and views at mintmoney@livemint.com

Source- Livemint.com

Shah Mohammad Abdul Qadir
         PGDM 3rd Sem 
IIMT college of Management
        Greater Noida, U.P.