Private equity investors bring in deals worth $983 mn in January: Thornton

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January was dominated by investments in start-ups which contributed to 52% of total investment volumes

Private equity (PE) investors announced deals worth $983 million in January, a 23 per cent rise in value terms over last year, driven by big ticket transactions, says a Grant Thornton report.

According to the assurance, tax and advisory firm, in January, there were 84 PE deals worth $983 million, against 81 such transactions worth $796 million in January 2017.

“Private equity deals recorded 4 per cent increase in deal volumes and 23 per cent increase in deal value in January 2018 as compared to January 2017,” said Pankaj Chopda Director at Grant Thornton India LLP.

January was dominated by investments in start-ups which contributed to 52 per cent of total investment volumes. On the other hand, energy & natural resources and real estate sectors witnessed big-ticket PE investment over $100 million together capturing 39 per cent of total PE deal values.

Altico Capital’s investment of $195 million across five realty projects in Hyderabad and Pune was the top PE deal in January.

Other major transactions include Canada Pension Plan Investment Board’s 6 per cent stake acquisition in ReNew Power Ventures for $144 million and Warburg Pincus and SAIF Partners’ $50 million investment in Rivigo Services.

Going forward, the PE deal outlook looks bullish especially for the start-up sector.

“Increasing customer penetration in online transactions and increasing solutions to simplify online transactions offered by start-ups will attract interest in start-ups engaged in retail, fintech, foodtech, on demand services and travel and logistics,” Chopda said.

“Government reforms such as RERA, focus on cleantech and on increasing digital financial transactions will drive the momentum in banking and financial, real estate and energy and natural resources.

India-specific strategies by global and already present PE firms and funds raised by new players will act as catalyst for PE transactions,” he added.

Source: Business Standard

 

Forex reserves rise to $421.72 bn

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India’s foreign exchange reserves rose by $1.96 billion to $421.72 billion on February 16, compared to the previous week. Foreign currency assets (FCAs), which form a key component of reserves, rose by $1.925 billion from the previous week to $396.572 billion.

India’s foreign exchange reserves rose by $1.96 billion to $421.72 billion on February 16, compared to the previous week.

Foreign currency assets (FCAs), which form a key component of reserves, rose by $1.925 billion from the previous week to $396.572 billion.

FCAs are maintained in major currencies like US dollar, euro, pound sterling and Japanese yen.

Movement in the FCAs occur mainly on account of purchase and sale of foreign exchange by the RBI, income arising out of the deployment of foreign exchange reserves, external aid receipts of the government and revaluation of assets.

Gold reserves remained stable at $21.514 billion.

Special drawing rights (SDR) from the International Monetary Fund rose by $13 million from the previous week to $1.546 billion.

SDR is an international reserve asset created by the IMF and allocated to its members in proportion of their quota at the IMF.

The Reserve Position in the IMF rose by $21.7 million to $2.087 billion.

 

Source: Financial Express

Qatar economy resilient, continues to perform well, says Seetharaman

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Qatar’s economy has proven its resilience and continues to perform well amid the blockade, improving local liquidity and gaining the confidence of international investors, said Doha Bank CEO Dr R Seetharaman.

“The blockade (on Qatar by a quartet of nations) came as a rude shock to us. But Qatar has withstood… it has proven to be a resilient model. Qatar’s economy was performing around 2.5% last year.

This year we are not expecting less than 3.1% growth,” Seetharaman told Gulf Times in an interview.

He said Qatar improved local liquidity by disinvestment last year.

“If you look at Qatar economy, liquidity was under stress to start with. The government improved local liquidity. Now international investors have reposed confidence in Qatar. The banking system as a whole is improving.

“The loan to deposit ratio in the Qatari banking system has significantly improved and now stands at 112%. This is an improvement of the level, immediately post blockade, which was at 116%.”

Qatar’s banking sector had witnessed credit expansion of around 9%, the deposit book has grown of more than 10.4%, he noted.

He said in the days that followed the blockade, there were challenges in terms of international investors slowing down on Qatar.

“They were concerned about the Qatar economic momentum. Even the rating agencies looked sceptical, which explains the negative outlook on the sovereign.”

But, Seetharaman said, Qatar’s ‘AA’ rating, which is still very high, has not been challenged although the international rating agencies have changed the sovereign outlook to negative. The high rating (A) of Qatar’s banks is also not challenged.

Currently, Qatar holds Aa- by Fitch, AA- by S&P and Aa3 by Moody’s.

“With strong exports, positive economic outlook, and natural gas markets unaffected by the economic blockade, the overall growth for Qatar remains sustainable,” Seetharaman noted.

The International Monetary Fund (IMF) in its latest World Economic Outlook revised up its forecast for world economic growth in 2018 and 2019, saying sweeping US tax cuts were likely to boost investment in the world’s largest economy and help its main trading partners.

Seetharaman also said new global forecast has a 3.9% growth this year and next. The advanced economies are expected to grow by 2.3% in 2018 and 2.2% in 2019.

The emerging and developing economies are expected to grow by 4.9% in 2018 and 5% in 2019.

India is projected to grow at 7.4% of its gross domestic product (GDP) in 2018 making it the fastest growing economy among emerging economies following last year’s slowdown due to demonetisation and the implementation of goods and services tax.

China, which is spearheading the ‘Belt and Road’ concept is expected to grow up to 6.6% this year, he added.

Source: Gulf Times

Foreign investors pump $3 billion into capital markets, forex at record high in January

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Foreign portfolio investors (FPIs) have invested a phenomenal $3 billion (close to Rs 18,000 crore) in India’s capital markets this month on expectations of high yields as corporate earnings are expected to pick up with the economy gathering momentum after the slowdown due to the chaotic implementation of GST.

The sharp increase in inflows comes after an outflow of over Rs 3,500 crore by foreign portfolio investors (FPIs) from the capital markets in December, data compiled by depositories shows. According to market analysts money pumped in by FPIs has played a key role in fuelling the bull run in the stock markets that saw both the Sensex and Nifty on a record breaking spree in recent weeks.

FPIs infused a net amount to the tune of Rs 11,759 crore in stocks and Rs 6,127 crore in debt during January 1-25 — translating into net inflows of Rs 17,866 crore. For the entire 2017, FPIs invested a collective amount of Rs 2 lakh crore in the country’s equity and debt markets.

The inflow in the current month can be attributed to anticipation of earnings recovery and attractive yields which is expected to further strengthen inflow from foreign investors in the current financial year, said Dinesh Rohira, CEO of 5nance, an online platform providing financial planning services.

However, Quantum MF Fund Manager-Fixed Income Pankaj Pathak believes that FPIs may not be able to repeat this showing in 2018 as withdrawal of liquidity and rate hikes in developed economies pick up. This would provide them with alternative avenues of investment.

The FPI investments have also helped to bolster the country’s foreign exchange reserves which touched an all-time high of USD 414.784 billion in the week to January 19, Reserve Bank data showed. The RBI data showed that the forex reserves rose by USD 959.1 million to touch a record high during the reporting week. In the previous week, the reserves had touched USD 413.825 billion after it rose by USD 2.7 billion.

The reserves had crossed the USD 400-billion mark for the first time in the week to September 8, 2017 but have since been fluctuating. But for the past four weeks the figure has shown a continuous rise. Higher foreign exchange reserves lead to a stronger rupee which in turn reduces the cost of imports as fewer rupees have to be paid to buy the same amount of dollars to pay for items such as crude oil.

A higher foreign exchange kitty also provides a comfortable cushion to finance imports especially at a time when crude prices are shooting up in the international market and the country’s trade deficit has been growing. However, while FPI inflows add to the forex reserves they are considered “hot money” as they can leave Indian shores at short notice and this could send the rupee into a tailspin.

A senior finance ministry official said that foreign direct investment (FDI) is a more stable source of funding for the economy and since it also creates jobs and incomes the government is keen to see an increase in such investments. The Prime Minister’s trip to Davos was aimed at achieving this goal, he pointed out. He said that the government has been working on the ease of doing business which has seen a sharp increase in FDI inflows and this policy will continue in the forthcoming budget. At the same time the government is keen FPI inflows are not disrupted due to tax levies on stocks that create uncertainties, he added.

 

Source: Business Today

Investment in participatory notes hits 6-month high of Rs.1.5 lakh cr in December

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According to SEBI data, the total value of P-note investments in Indian markets – equity, debt, and derivatives – increased to ₹1,52,243 crore at December-end from ₹1,28,639 crore at the end of November.

Investments in domestic capital markets through participatory notes (P-notes) surged to a six-month high of over ₹1.5 lakh crore at December-end despite stringent norms put in place by regulator SEBI to check their misuse.

P-notes are issued by registered foreign portfolio investors to overseas investors who wish to be part of Indian stock markets without registering themselves directly. They, however, need to go through a proper due diligence process.

According to SEBI data, the total value of P-note investments in Indian markets – equity, debt, and derivatives – increased to ₹1,52,243 crore at December-end from ₹1,28,639 crore at the end of November.

This is the highest level since June when the cumulative value of such investments stood at ₹1.65 lakh crore.

Of the total investments in November, P-note holdings in equities were at ₹1.2 lakh crore and the remaining in debt and derivatives markets.

Besides, the quantum of FPI investments via P-notes surged to 4.6% during the period under review from 4% in the preceding month.

Prior to the recent surge, P-note investments were on a decline since June and hit an over eight-year low in September. However, these investments slightly rose in October but fell in November.

These declines could be attributed to several measures taken by markets regulator Sebi to stop the misuse of the controversy-ridden participatory notes.

In July, SEBI notified stricter P-notes norms stipulating a fee of $1,000 that would be levied on each instrument to check any misuse for channelising black money.

Also, SEBI prohibited FPIs from issuing such notes where the underlying asset is a derivative, except those which are used for hedging purposes.

The move was a follow-through of the SEBI board’s approval of a relevant proposal in June. These measures were an outcome of a slew of other steps taken by the regulator in the recent past.

In April, SEBI had barred resident Indians, NRIs and entities owned by them from making the investment through P- notes.

The decision was part of efforts to strengthen the regulatory framework for P-notes, which have been long seen as being possibly misused for routing black money from abroad.

Foreign investors pump $3 billion into capital markets, forex at record high in January

by | posted in: Corporate Updates, Cross Border Transactions, M&As, Joint Ventures, Economy, Business Updates, Corporate Affairs, India & International - Corporate updates | 0

Foreign portfolio investors (FPIs) have invested a phenomenal $3 billion (close to Rs 18,000 crore) in India’s capital markets this month on expectations of high yields as corporate earnings are expected to pick up with the economy gathering momentum after the slowdown due to the chaotic implementation of GST.

 

The sharp increase in inflows comes after an outflow of over Rs 3,500 crore by foreign portfolio investors (FPIs) from the capital markets in December, data compiled by depositories shows. According to market analysts money pumped in by FPIs has played a key role in fuelling the bull run in the stock markets that saw both the Sensex and Nifty on a record breaking spree in recent weeks.

 

FPIs infused a net amount to the tune of Rs 11,759 crore in stocks and Rs 6,127 crore in debt during January 1-25 — translating into net inflows of Rs 17,866 crore. For the entire 2017, FPIs invested a collective amount of Rs 2 lakh crore in the country’s equity and debt markets.

 

The inflow in the current month can be attributed to anticipation of earnings recovery and attractive yields which is expected to further strengthen inflow from foreign investors in the current financial year, said Dinesh Rohira, CEO of 5nance, an online platform providing financial planning services.

 

However, Quantum MF Fund Manager-Fixed Income Pankaj Pathak believes that FPIs may not be able to repeat this showing in 2018 as withdrawal of liquidity and rate hikes in developed economies pick up. This would provide them with alternative avenues of investment.

 

The FPI investments have also helped to bolster the country’s foreign exchange reserves which touched an all-time high of USD 414.784 billion in the week to January 19, Reserve Bank data showed. The RBI data showed that the forex reserves rose by USD 959.1 million to touch a record high during the reporting week. In the previous week, the reserves had touched USD 413.825 billion after it rose by USD 2.7 billion.

 

The reserves had crossed the USD 400-billion mark for the first time in the week to September 8, 2017 but have since been fluctuating. But for the past four weeks the figure has shown a continuous rise. Higher foreign exchange reserves lead to a stronger rupee which in turn reduces the cost of imports as fewer rupees have to be paid to buy the same amount of dollars to pay for items such as crude oil.

 

A higher foreign exchange kitty also provides a comfortable cushion to finance imports especially at a time when crude prices are shooting up in the international market and the country’s trade deficit has been growing. However, while FPI inflows add to the forex reserves they are considered “hot money” as they can leave Indian shores at short notice and this could send the rupee into a tailspin.

 

A senior finance ministry official said that foreign direct investment (FDI) is a more stable source of funding for the economy and since it also creates jobs and incomes the government is keen to see an increase in such investments. The Prime Minister’s trip to Davos was aimed at achieving this goal, he pointed out. He said that the government has been working on the ease of doing business which has seen a sharp increase in FDI inflows and this policy will continue in the forthcoming budget. At the same time the government is keen FPI inflows are not disrupted due to tax levies on stocks that create uncertainties, he added.

 

Source: Business Today

PE investments jump 55% to all-time high of $24 bn across 591 deals in 2017

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Flipkart received India’s largest ever PE investment of $2.5 billion in a single round from Softbank

Private equity firms invested $23.8 billion across 591 deals in 2017, making it the biggest year for PE investments in India, says a report.

According to deal tracker Venture Intelligence, the investment value is 39 per cent higher than the previous high of $17.1 billion (recorded in 2015) and 55 per cent higher than $15.4 billion invested during 2016. In terms of number of deals the year 2017 saw 21 per cent less activity as compared to 2016 (731 deals), indicating large number of big-ticket transactions.

“The year witnessed 31 investment deals with size greater than USD 200 million, aggregating to $15.4 billion or 65 per cent of the total investments,” the report said. These figures include venture capital investments, but exclude PE investments in real estate.

In terms of industries, IT/ ITeS companies accounted for 45 per cent of the value pie attracting $10.7 billion worth investments across 325 transactions.

Flipkart received India’s largest ever PE investment of $2.5 billion in a single round from Softbank and another $1.4 billion from strategic investors Tencent, eBay and Microsoft. Softbank also invested $1.4 billion in mobile wallet and payments firm One97 Communications, which owns the Paytm brand. BFSI (Banking, Financial Services and Insurance) companies continued to enjoy the second spot attracting $4.40 billion across 61 transactions.

The sector was led by Bain Capital’s $1.04 billion investment in Axis Bank — the largest ever single investment in the sector — and Warburg Pincus’ $384 million pre-IPO investment in ICICI Lombard General Insurance.

On the back of its two mega bets (Flipkart and Paytm), Softbank emerged as the largest investor during the year with investments totaling over $4 billion (including a $250 million investment in Oyo Rooms).

Other top investors include Canadian pension fund CPPIB with $2 billion investments across five companies; while Warburg Pincus invested $1.6 billion across nine companies, and KKR invested about $680 million.

China’s Tencent emerged as a significant strategic investor in the Indian Internet and mobile sector with investment of $1.1 billion across home grown leaders like Flipkart, Ola, Byjus Classes and Practo.

 

Source: Business Standard