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BIGGEST PE DEALS
Golden handshakes
Get savvy about the biggest private equity deals over the last year, the biggest dealmakers and what Venture Capitalists look for when zeroing in on potential start-ups! Also in this package, meet the stalwarts at Saif Partners and Bessemer Venture Partners to get a grip on their India strategy. Plus, columns by entrepreneurs who made it big with timely PE investments...
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 Investee: DLF Assets Ltd.
Investor: D. E. Shaw & I PCC
Investment Value: $600 mn (cumulative)
Says, Naveen Jain, Real Estate Analyst, Emkay Share, “DLF Assets holds property and earns its bread and butter from the capital appreciation and rents from various properties that it has acquired from DLF. The infusion of growth capital will help DLF Assets to acquire more and more assets. DE Shaw & I PCC are betting on the Singapore listing (and may exit at the time of listing to rake in handsome returns) for which DLF Assets still needs to provide a lot of clarifications. For now, DAL is aggressively adding more properties to its existing portfolio, with plans to spend $1 billion annually for acquiring properties.”
DLF Assets Ltd. (DAL), a sister concern of DLF, sprang a surprise last year, striking it rich with not one but two PE deals, one with Hedge Fund D.E. Shaw for $400 million and the other with New Opportunities I PCC (sponsored by Lehman Brothers) for $200 million. The deals give DAL requisite growth capital and investors will gain by selling their stake in DAL through the proposed listing as a Real Estate Investment Trust (REIT) in Singapore Stock Exchange. They plan to raise as much as $2 billion by the listing. “The process of listing is in advance stages and pretty soon other details will be revealed,” offers a source in DLF. Both investors will get a seat on the DAL board and will play a critical part in future decisions. In HY ’08, sales to DLF Assets accounted for a huge 47% of DLF’s total income. DLF Assets has acquired more than 5.5 million square feet from DLF. To further boost its portfolio, DAL also plans to acquire SEZ assets.
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 Investee: India Cements Ltd.
Investor: Fidelity, ABN Amro, HSBC, et al
Investment Value: $137.67 mn
The capital raised through this deal will give the much-needed impetus to ICL’s expansion plans. Substantiates V. M. Mohan, ICL, Joint President (Corporate Finance), “We are in the process of raising capital to fund a Rs.1,450 crore expansion plan that would double its cement production capacity to 18 million tonnes over the next two years, and to set up a 40-50 MW captive power project and buy two ships for coal transport. The QIB issue is a part of that.” The company may also reduce their debt balance through these issues.
Qualified Institutional Buyers (QIBs) – Fidelity, HSBC, ABN Amro, among others – in a deal worth Rs.592 crores bought 7.5% stake in India’s third largest cement firm, India Cements Ltd. (ICL) in December last year. Considered to be the largest cement player in South India, the company boasts of seven manufacturing locations, spread over Andhra Pradesh and Tamil Nadu. ICL issued 20.78 million shares at Rs.285 per share, including premium, to these QIBs. With an objective to become a pan India cement manufacturer (and plans to increase capacity to 18 MTPA by December 2010), the company wants to use the net proceeds of the issue primarily for capital expenditure and other expenditure support. They also plan to finance new projects through this issue. The cement maker is setting up two plants in Rajasthan and Himachal Pradesh, besides having several mining leases in these two states. Considering the boom in the domestic infrastructure and real estate market, the demand for cement has been going up for some time; and ICL is poised to benefit from this latent potential.
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