Patni set to announce ownership change today
Patni Computer Systems, is set to announce an ownership change on Monday, Jan 10 with its promoters, the Patni brothers, and private equity firm General Atlantic selling their 60 percent plus stake to iGate.
Under the terms of the deal with iGate, the promoters have an 18 month non-compete clause during which they will not be able to start a similar business. The non-compete clause will not be applicable to the second generation of the promoters family and to existing businesses. Narendra Patni's son Anirudh Patni, who was earlier with Patni Computer, has a Company called Patni Technologies, but Anirudh Patni is not covered under the non-compete agreement, he will be free to start a software business.
The deal with iGate-Apax will trigger an open offer to the public for another 20 percent of the shareholding. iGate is expected to merge Patni Computer with itself and the joint entity is likely to be headed by iGate CEO and former Infosys marketing head Phaneesh Murthy.
Foreign Banks may downsize private equity investments
Foreign banks may downsize their private equity investments, paving the way for pure-play private equity firms to become more active in the country. The development follows the restriction imposed by Paul Volcker Rule, approved by US president Barack Obama's government in 2010. According to it, banks operating in the US cannot hold more than 20 percent stake or 3 percent of their total net-worth in private equity arms and hedge funds worldwide.
With foreign banks looking to reduce their holding in private equity entities, India Inc will be forced to opt for alternate route for raising risk capital. As per industry estimates, at least $30 billion of pure private equity money is waiting to be deployed in India. In Dec 2010, HSBC sold its private equity arm to 16 member management team headed by George A Raffini. In November, Bank of America Merrill Lynch sold its $2 billion-Asian real estate fund to the Blackstone Group.
IOT Infrastructure mulls Rs.800 cr IPO by Mar
Indian Oil Corporation (IOC) co-promoted oil EPC firm IOT Infrastructure and Energy services, to rejig the timing of its Rs 800 crore IPO. The firm which started as a dedicated player in oil tanking services in 1998 as an equal joint venture between IOC and German company Oil Tanking GmBH, is ready with all the required permissions, but is constrained because of the choppy market conditions. The company had filed its draft red herring prospectus with capital markets regulator Sebi for the IPO in Sep which entails marginal divestment by its existing owners and issue of fresh shares. Post-IPO, IOC and the German firm's stake in the company will drop to 37.5 percent each, while the general public will hold the remaining 25 percent, in compliance with Sebi directive on shareholding.
Over 80 percent of the IOT Infrastructure's revenues come from the engineering, procurement and construction (EPC) space in the oil industry. A majority of the rest come from the terminalling service and newer divisions like catering to upstream clientele and a renewable energy business. Proceeds of the IPO are to be used for a capital expenditure of Rs 1,920 crore for setting up a facility in Paradip and Rs 350 crore outlay planned for a unit in Raipur. The public issue involves sale of 58.19 million fresh shares and offer for sale of 14.59 million shares by the promoters.
Fortis wants to expand in West, S-E Asia
Fortis Global Healthcare Holdings, has submitted an expression of interest to the Hong Kong government to start hospitals there. The firm is also looking for inorganic growth opportunities in Asian and South-East Asian countries. Hong Kong is undergoing large scale health reforms, as a part of it; the government had recently invited private players to start hospitals there.
(An article by DAS CAPITAL MANAGEMENT AND ADVISORS Pvt Ltd)