December 23rd, 2023
MergerDomo’s weekly Newsletter brings you the latest on M&As, JVs, Investments, IPO and noteworthy partnerships that are shaping the future of businesses in India.
This week's M&A highlights in India feature significant deals, such as -
British American Tobacco (BAT) contemplates reducing its 29.02% stake in India's ITC to 25%, citing India's stringent FDI rules for the tobacco sector. BAT's CEO, Tadeu Marroco, emphasizes the complexities involved, including regulatory hurdles and specific RBI approvals. Despite ITC's diverse portfolio encompassing cigarettes, FMCG, hotels, and agri-business, BAT sees opportunities for ITC's share price growth, especially with the ongoing demerger of its hotel business. Marroco assures that BAT has no intention to remain in the hotel business, underscoring the challenges associated with divesting from ITC.
Read more lessEdelweiss Financial Services embarks on a pivotal journey, announcing the sale of a 10%-20% equity stake in Edelweiss Alternative Asset Management (EAAM), with plans to raise INR 15-20 billion. The move aims to slash the company's debt, enhance market value, and capitalize on EAAM's robust growth, boasting a 31% CAGR in assets under management since fiscal year 2017. With substantial interest in the stake sale, the transaction is anticipated to conclude in four to five months, marking a strategic shift for Edelweiss Financial.
Read more lessAdani Enterprises, led by billionaire Gautam Adani, has acquired a 50.5% stake in news agency Indo-Asian News Service (IANS) through its subsidiary, AMG Media Networks. The deal, valued at INR 510,000, grants Adani full operational control. IANS marks Adani's third major media acquisition in two years, following Quintillion Business Media and a majority stake in NDTV. Adani aims to bolster IANS in social media and video realms, emphasizing news and information as crucial within the media and entertainment industry. The move expands Adani's footprint in this strategic sector.
Read more lessBain Capital engages in discussions with Macquarie Capital to acquire a majority stake in Vibrant Energy, a green power provider for commercial and industrial clients, valuing the company at around USD 200 million equity and close to USD 500 million enterprise. The stake sale attracted interest from players like Sun Energy and Vitol. Vibrant Energy, with a 132MW renewable energy portfolio and a 3GW pipeline, draws attention in the booming energy transition space. As Bain explores strategic investments in energy, the deal signifies a strategic move in the Commercial and Industrial renewables market.
Read more lessGlenmark Pharmaceuticals experienced a fluctuating market response after the Competition Commission of India (CCI) granted approval for Nirma's acquisition of a significant stake in Glenmark Life Sciences. The deal, valued at INR 5,651.5 crore, involves Glenmark Pharmaceuticals divesting a 75% stake in its subsidiary. Glenmark has three years to meet SEBI's requirement of reducing the promoter's stake to 75%. Nirma, renowned for its household and industrial products, expands its portfolio with this strategic move into pharmaceuticals. Shares of both companies experienced market reactions following the regulatory nod.
Read more lessCash-strapped SpiceJet has expressed interest in acquiring the bankrupt carrier Go First, proposing a strategic combination to create a robust airline. The unexpected move, alongside Sharjah-based Sky One and Safrik Investments, comes after the proposal deadline lapsed, prompting lenders to consider liquidation. SpiceJet's board has initiated a capital raise of USD 270 million to reinforce its financial standing. With arrears and an arbitration award pending, Go First's resolution faces challenges, including legal disputes with lessors. Lenders, owed over INR 6,200 crore, seek an extension, and the acquisition landscape remains uncertain amid regulatory and legal complexities.
Read more lessVijaya Diagnostic Centre announces the full acquisition of Pune-based PH Diagnostic Centre for a cash consideration of INR 134.65 crore. With board approval, the deal includes infusing INR 12.85 crore to settle existing debt. Post-acquisition, PH will become a wholly-owned subsidiary, aiding Vijaya Diagnostics' objective to build a comprehensive diagnostic network. This strategic move aims to enhance market share and penetration, particularly in Pune, Maharashtra. Vijaya Diagnostics shares surged 5% on the news, reflecting the company's commitment to rapid expansion and growth in Western India.
Read more lessJB Chemicals & Pharmaceuticals (JB Pharma) announces an all-cash deal to acquire select ophthalmology brands from Novartis, valued at INR 1089 crore. The agreement includes a INR 964 crore perpetual portfolio licensing deal effective from January 2027 and a INR 125 crore promotion and distribution pact for three years starting December 2023. Financed through internal accruals, this move positions JB Pharma among the top four players in the ophthalmology market, marking a strategic growth initiative in the rapidly expanding sector with over 15% annual growth.
Read more lessLivguard, an Energy Storage and Solutions company, part of the SAR Group, announces the strategic acquisition of Emuron Technologies, specializing in battery swapping and intelligence solutions for electric two- and three-wheelers. Livguard, known for its expertise in inverters, automotive batteries, and solar solutions, aims to accelerate the adoption of electric vehicles through Emuron's technology. This collaboration positions Livguard as a comprehensive solutions provider in the evolving energy transition landscape for two- and three-wheeler electric vehicles, marking a significant move in the competitive electric vehicle market.
Read more lessJindal Stainless Limited (JSL) has greenlit the acquisition of Rabirun Vinimay Private Ltd, currently under liquidation, at a cost of INR 96 crore. The acquisition targets RVPL's potential cold-rolling manufacturing capacity, specifically in the wider and thinner segments, with additional capacity for pipes and tubes. The move aligns with JSL's strategy to augment cold-rolling capabilities for diverse applications. RVPL's facility, located in West Bengal, is poised to bolster JSL's position in key industries. The completion of the acquisition is contingent on the sale certificate from the official liquidator, expected in the current financial year.
Read more lessIn a pioneering move, Punjab State Power Corp (PSPCL) is poised to acquire GVK Power (Goindwal Sahib) by offering INR 1,400 crore to lenders, marking the first state-run discom takeover of a private electricity generator undergoing insolvency. PSPCL, the sole bidder, secured unanimous lender approval for its resolution plan, implying a 21% recovery for creditors. Twelve corporates initially expressed interest, including Adani Power and Vedanta, but withdrew due to litigations. The strategic acquisition sets a landmark as the state seeks to resolve a complex situation arising from legal disputes and unpaid dues.
Read more lessBengaluru-based BHIVE Workspace has bolstered its technology platform through the acquisition of product-engineering firm Praemenio. The deal involves a composite structure of cash and equity, with 10-member Praemenio team joining BHIVE, including co-founders Rohit Parab and Gaurav Gandhi. Focused on streamlining financial management and operations, the acquihire aims to support BHIVE's expansive coworking portfolio of 1.5 million sq ft across 25 locations. The strategic move aligns with BHIVE's commitment to tech-driven solutions and will fortify its fintech arm, enhancing business efficiency in its coworking and real estate ventures.
Read more lessGlobal private equity major General Atlantic is poised to acquire a majority 70% stake in Delhi-based Ujala Cygnus Healthcare Services, valued at approximately INR 1600 crore. The deal includes GA purchasing a 51% stake from existing investors Eight Roads Ventures India, Evolvence India Fund, and Somerset Indus Healthcare Fund. Alongside, GA will also acquire a minority stake from the promoters. The documentation stage is underway, with the signing expected in the coming weeks. Ujala Cygnus operates 19 hospitals, primarily in Tier-II and Tier-III cities, aiming to expand its healthcare footprint further.
Read more lessSiemens Ltd., the Indian arm of German engineering firm Siemens AG, announces board approval for the demerger of its energy business into a standalone unit. Simultaneously, a wholly-owned subsidiary in Mumbai is greenlit for immediate incorporation. This strategic move follows Siemens AG's recent commitment to acquire an 18% stake in Siemens Ltd for INR 18,955 crore. The demerger plan is set to reshape Siemens India's ownership structure, with Siemens AG's stake rising to 69% and Siemens Energy's decreasing to 6%. The bold actions signify Siemens' dynamic strategic evolution in the Indian market.
Read more lessAllcargo Logistics is set to demerge its lucrative international business, ECU Worldwide, creating a separate listed entity called Allcargo ECU Ltd. This move is the culmination of the company's strategic restructuring, initiated by selling non-core assets, providing exits to partners, and acquiring their stakes. The resulting structure will comprise four listed entities, enhancing business focus and operational efficiency. The restructuring aims to simplify the corporate structure, with the scheme expected to be implemented in 10-12 months, fostering synergy and growth in the domestic logistics market.
Read more lessIndia's Competition Commission (CCI) scrutinizes the Burman family's actions in Religare Enterprises, inquiring about a potential merger, management involvement, or board representation. The CCI requests communication documents between the Burmans and Religare from 2017 to 2023, questioning their initial acquisition non-disclosure. Amid allegations and a tussle between Religare and the Burmans, the CCI investigation reveals interconnected steps leading to a 5% stake purchase and a proposed open offer. The probe intensifies as Religare accuses the Burmans of evading regulatory approval, citing an overlapping interest in insurance and financial businesses.
Read more lessSony Group and Zee Entertainment aim to finalize their merger, creating a USD 10 billion media giant, with a revised deadline extending to the end of January 2024. Amid the looming merger, Zee has sought an extension, citing ongoing negotiations. However, internal discord arises over leadership, as Sony opposes Punit Goenka's appointment, favoring NP Singh for the CEO role. The leadership tussle adds complexity to the mega-deal, with corporate governance norms and conflicting visions for the new entity driving discussions as the merger saga unfolds.
Read more lessHappy Forgings, an engineering-led manufacturer, witnessed robust demand in its IPO with an 82 times subscription, fueled by institutional investors. Although the grey market premium (GMP) slightly dipped to INR 405, market trends suggest a potential debut premium exceeding 80% on the listing date, anticipated for December 27. The company, catering to automotive and non-automotive sectors, aims to utilize the net proceeds for equipment purchase, debt prepayment, and general corporate purposes. With impressive financials and substantial growth, Happy Forgings positions itself for a promising market entry.
Read more lessSameera Agro & Infra's IPO, priced at INR 180 per share, garnered 72% subscription on the second day. The issue size, aimed at raising INR 62.64 crore through a fresh issue of 34.8 lakh shares, witnessed bids for 25,23,200 shares against the total offering. The IPO, closing on December 27, has a lot size of 800 shares. The company, with diversified business activities in infrastructure development and agriculture processing, anticipates listing on January 1. Investors eye its market entry and potential growth amid the IPO's ongoing success.
Read more lessAzad Engineering's IPO witnesses a robust response, getting subscribed 22 times on the final day. The non-institutional investor category leads with a remarkable 50.29 times subscription, followed by retail investors at 17.23 times. Market analysts note the company's shares trading with a premium of INR 440 in the unlisted market, reflecting an 84% upside over the issue price. With a price band of INR 499-524, the IPO attracts investor interest, underlining confidence in Azad Engineering's strong financial track record and growth outlook.
Read more lessInnova Captab's IPO records a robust subscription at 1.41 times on the second day. Retail and non-institutional segments show healthy interest at 2.12 and 0.96 times, respectively. Qualified institutional buyers (QIBs) contribute to a subscription of 0.44 times. The company, valued at an FY23 P/E multiple of 37.7x, is an integrated pharmaceutical player with a comprehensive value chain. The IPO, with a price band of INR 426-448, aims to raise INR 570 crore. Analysts note a current GMP of INR 210, signaling a 47% premium.
Read more lessThe share allotment for Credo Brands IPO is finalized through a lottery process supervised by the registrar. Investors will learn the number of allotted shares against their bids, with allotment status available on BSE. The IPO, subscribed 51.85 times, witnessed strong demand, with the QIB portion oversubscribed 104 times and NIIs at 55.52 times. Credo Brands, home to the "Mufti" brand, holds a significant market share in men's casual wear. Shares are anticipated to list on December 27, with an unlisted market premium of INR 145.
Read more lessInvestors in Muthoot Microfin's INR 960-crore IPO eagerly await the allotment status as the issue garnered significant interest, with over 28.09 crore share bids against the issue size of 2,43,87,447 shares. The RII and NII categories witnessed robust subscription at 7.61 and 13.20 times, respectively, while QIBs subscribed 17.47 times. The microfinance firm, backed by INR 285 crore from 26 anchor investors, plans to enhance its capital base to meet RBI regulations. The allotment is anticipated on December 22, with listing scheduled for December 26.
Read more lessThis week's M&A news reflects the dynamic nature of India's corporate landscape, featuring diverse transactions in healthcare, biotechnology, energy, FMCG, Consumer care, infrastructure, private equity, mobility, media, finance, logistics, and automotive sectors. Stay updated on India's M&A developments as we continue to bring you the latest news and insights.
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