Ybrant buys 3 of Experian's US-based firms for $175 mn

Hyderabad: Indian digital marketing and advertising firm Ybrant Digital has announced acquiring three US-based firms belonging to the UK-based company Experian for $175 million, making it its largest ever acquisition.

Ybrant has a track record of eight acquisitions including the search engine firm Lycos for $36 million. The three firms being bought now include PriceGrabber into online comparison shopping, LowerMyBills into personal finance and ClassesUSA into educational services.

With the latest buys, Ybrant becomes the world's second largest digital marketing and advertising company in the $70 billion global market after the US-based ValueClick that reported $560m of sales last year.

ET broke the story on 7 March that Ybrant was on the verge of making its largest ever acquisition for around $200m with the target firms into comparison shopping, personal finance and educational services with combined sales of around $300 million.

Ybrant chairman and chief executive Suresh Reddy told media on Thursday that the three entities being now acquired have combined sales of $283 million. The combined sales of Ybrant and LGS Global, the listed entity now being merged into Ybrant, are pegged at around $250m, taking the total size of Ybrant post latest acquisitions to around $533m.

Reddy said of the $175m consideration, the company will pay around $100m through cash and around $75 through seller notes to be paid over a period of three years. Ybrant has already tied-up with ICICI Bank and Credit Suisse for the $100m bridge loan, which will be cleared by raising equity funds through QIP/FCCB issue sometime during the year.

Ybrant expects the merger process with LGS Global to be completed over the next 2-3 months, upon which the lenders will extend $100m bridge loan to part finance the latest acquisitions.

The Hyderabad-based firm had so far raised over $100m of funds from global private equity players including Oak Investment Partners, GE Asia Pacific Capital, a Boston based large mutual fund among others.

Others private equity players who had invested in the company include Avenue, Passport Capital, Venus Capital, Delaware State Capital and Eight Capital. It had raised $48m, largest ever in one go, in January last year through a mix of debt and equity from Oak Indian Investment, Asia Pacific Capital and ICICI Bank to fund expansion including inorganic growth.

On Thursday, LGS Global stock fell by around 2% at Rs 90 on BSE, the day the exchange's benchmark Sensex lost 59 points to close at 16,420 points.

Registration mandatory for investment overseas

Mumbai: Core investment companies (CICs) making overseas investment in the financial sector will require a Certificate of Registration, said the Reserve Bank of India.

Currently, CICs with an asset size of less than Rs 100 crore are exempt from registration with the RBI. Investment in the non-financial sector by such exempted CIC, however, will not require CoR.

CICs with an asset size of Rs 100 crore or more are considered as systemically important core investment companies and require to a CoR from the RBI.

CICs are purely investment companies that invest in shares and securities of subsidiary companies and joint ventures. They also give loans to subsidiaries and joint ventures. Sometimes, promoters hold stakes in various companies through such investment vehicles.

The RBI, in its ‘draft directions' for overseas investment by CICs, said post overseas investment, a CIC should maintain the requirement of adjusted net worth of not less than 30 per cent of its aggregate risk weighted assets.

The level of net non-performing assets of the CIC should not be more than one per cent of net advances.

A CIC investing overseas should be earning profit continuously for the last three years. The aggregate overseas investment should not exceed 400 per cent of the owned funds of the CIC.

The aggregate overseas investment in the financial sector should not exceed 200 per cent of its owned funds.

A CIC should have only fund-based overseas investment in financial/ non-financial sector. CICs should ensure that investment made abroad do not result in creation of complex structures. Further, all subsidiaries and JVs set up abroad must be operating entities.

As CICs are non-operating entities, they will not, in the normal course, be allowed to open branches overseas.

A subsidiary being established abroad should not be a shell company (a company which does not have significant assets or operations). However, companies undertaking activities such as financial consultancy and advisory services will not be considered as shell companies as they will have significant operations.

The RBI said the subsidiary being established abroad by the CIC should not be used as a vehicle for raising resources for creating assets in India for the Indian operations.

'Japan and Kerala share industry focus'

Thiruvananthapuram: The striking similarities between Japan and Kerala on the theme of focus for industry will help promote Japanese investments here.

There is a shared liking for the small and medium sector, says Mr Masanori Nakano, Consul-General of Japan in Chennai.

SME Backbone
He said this while addressing a business meet organised here by the Japanese Cultural and Information Centre. The sub-centre of the Alumni Society of the Association for Overseas Technical Scholarship based here was a joint organiser.

Mr Nakano said that SMEs were the backbone of the Japanese industry. They have the potential for income and employment generation.

The recent high-level meetings held between the two nations have given a boost to the Indo-Japanese ties. The Prime Minister, Dr Manmohan Singh, is set to visit Japan later this year.

Promoting Industry
Mr Nakano was of the view that the State government has been giving due encouragement for promoting investments locally. He cited examples of the Vallarpadam international container transhipment terminal, the proposed Vizhinjam port, Kochi metro rail project and the Kannur airport.

The States have been vying with one another to attract foreign investment. Kerala should also try to make most of the emerging situation, Mr Nakano said.

According to Industries Minister Mr P. K. Kunhalikutty, attempts for bringing in Japanese technology and investments have been made in the past.

But not all of them have been successful. The present government led by Chief Minister Mr Oommen Chandy is leading a fresh drive.

'Emerging Kerala'
Mr Kunhalikkutty sought the active presence of Japanese entrepreneurs in the ‘Emerging Kerala' industrial investment meet planned here later this year.

Mr T. Balakrishnan, managing director, Inkel, said in his presidential address that the State offered a perfect environment for Japanese investments to thrive.

Japan could look at shifting its R&D base to Kerala and make it an export hub, he added.

Abu Dhabi team to visit AP for refinery project

Hyderabad: The International Petroleum Investment Company of Abu Dhabi will depute a technical team of experts for the identification of a suitable location for setting up a refinery in Andhra Pradesh.

During the CII Partnership Summit 2012 held in Hyderabad in January, the BR Shetty Group of Abu Dhabi had entered into a memorandum of understanding with the Andhra Pradesh Government, for setting up a petroleum refinery at an investment of $6 billion (about Rs 30,000 crore).

Dr J. Geetha Reddy, AP Minister of Industries, along with Mr T.S. Appa Rao, Principal Secretary Industries, and Mr Karikal Valaven, Commissioner of Industries, met Mr Khadem A. Al Qubaisi, Managing Director of International Petroleum Investment Company, owned by the Abu Dhabi Government, and Dr B.R. Shetty, recently, as a follow up.

According to a Government statement Mr Al Qubaisi has expressed keen interest in establishing a petroleum refinery in Petroleum, Chemical and Petrochemical Industrial Region (PCPIR) of Andhra Pradesh coming up in the Kakinada-Vizag corridor.

Biotech team to showcase India life sciences sector at Boston BIO meet

Bangalore: The Association of Biotech Led Enterprises (ABLE) is leading an Indian biotech delegation to BIO international convention held at Boston, US.

A team of 40-member companies are to showcase and effectively position Indian life-sciences sector in global landscape.

As part of the BIO convention, ABLE is to hold exhibition, India evening networking reception, Biotech Mission, India exhibitor catalogue show

The main agenda for the industry body is to facilitate opportunities to Indian industry for business and research and development collaborations and for Indian R&D/academic institutions to showcase R&D strengths for co-operation.

ABLE plans to showcase biotech parks established (and under establishment) in various States to attract global biotech industries to India.

Essar Energy signs PPA with Noida Power Company Ltd.

Kolkata: Essar Energy Plc signed a power purchase agreement (PPA) with Noida Power Company Ltd for 240 mw of contracted capacity from Essar Energy's 600MW coal-fired Tori II power station which is under construction in Jharkhand.

The binding PPA was signed by Noida Power Company Ltd with Essar Energy's subsidiary Essar Power Jharkhand Limited (EPJL) and has a 25 year duration, Essar Energy said in a statement.

The PPA was secured following a competitive bidding process, with supply of power under the terms of the PPA being due to commence from April 2014.

Under the terms of the agreement, Essar Energy will supply power at a delivered levelised tariff, including transmission costs, of Rs.4.08 per kilowatt hour (approximately 7.6 US cents per kWh), which is the highest long term tariff achieved through competitive bidding in India to date.

The agreement is the first PPA that has been signed for the Tori II project. At its 1,200 mw Tori I project, which is also under construction, Essar Energy has already signed two PPAs of 300MW and 450MW, both for 25 years, with the Bihar State Electricity Board.

Essar Energy currently has 2,200 mw of generation capacity operational, with a further 2,310 mw of capacity due to be commissioned this year at the Salaya I, Mahan I and Vadinar P2 projects. Beyond this four more power projects are due to be commissioned by March 2014, including the Tori I and Tori II projects, which will take Essar Energy's total to 6,700MW by that date.

Govt banks to install 60,000 more ATMs

Mumbai: After a gap of six to eight months, public sector banks (PSBs) have geared up to establish 60,000 more Automated Teller Machines (ATMs) across the country over the next two years. The state-owned lenders had put their ATM expansion on hold as a centralised outsourcing model was being worked out by a committee appointed by the government.

ATM machine manufacturers and payment service providers will be participating in the bidding process, being led by six major PSBs — State Bank of India, Punjab National Bank, Union Bank of India, Bank of India, Bank of Baroda and Canara Bank.

“This will be a completely outsourced model. The requirements for 22 regions across India have been clubbed into 16 bidding circles,” said a senior official from a payment service provider company.

“We expect the whole process to be completed in June and results to be announced by June-end,” the official added.

According to data from National Payments Corporation of India, the number of ATMs in the country — of private, public, foreign and cooperative banks, part of the National Financial Switch connecting all ATMs — had reached 98,025 by the end of April 2012.

A study by ATM manufacturer NCR Corporation India shows about 70 per cent of deployment has been in urban areas.

“Though the total requirement does not specify an urban-rural ratio, a higher deployment in rural areas is being considered,” said a senior official of a large PSB.

Customised ATMs for rural areas are also being tested. “The machines used in metros may not be relevant in rural areas,” said Jaivinder Gill, managing director, NCR Corporation. He said the company had developed machines that could interact with the user in 23 languages and use biometric authorisation as a safety feature if the user was not comfortable with PIN identification.

Of the ATMs in rural India, about 20 per cent are owned by private sector banks. The ratio is expected to change with the entry of non-bank entities or White Label ATM operators. White label ATMs are those owned and operated by non-bank entities.

“The banking space has seen considerable growth through ATMs, but it has been restricted principally to the urban/metro areas,” said the Reserve Bank of India in a draft report on White Label ATMs released in February.

The central bank said allowing entities other than banks would help the overall objective of financial inclusion. The final guidelines on the proposed model are awaited.

Pune logs $800 m PE funding

Mumbai: Pune happens to be a favoured destination for real estate private equity funds since foreign direct investment was opened up for real estate in 2005.

Most of the funds are based out of Mumbai, which gave Pune obvious preference, as its close proximity allows easy tracking and monitoring of the market and their investments. Further, Pune is among the most rapidly growing cities in India after Mumbai, NCR and Bangalore, said Mr Sameer Gholve, Manager - Capital Markets, Jones Lang LaSalle India.

The total flow of PE funds into Pune up to December 2011 was about $800 million. This consists of both foreign and domestic monies through 32 major transactions over the last five years. The year 2009 saw the lowest flow of private equity funds into the city, though Investors regained confidence in 2010.

Sixty one per cent of the total private equity flows were into residential projects in East Pune. East Pune has the majority of the city's IT industry developments such as Magarpatta Cyber City in Hadapsar, EON IT Park in Kharadi, CommerZone in Yerawada and Weikefield IT Park on Nagar Road, he said.

The development in IT has had a major spin-off effect on the profile of these areas. The higher spending power and commensurate aspirations of the people working in these establishments has led to massive malls coming up in the locality and in turn generated a huge demand for quality residential projects, he added.

India sees scope for greater bilateral cooperation with Afghanistan

New Delhi: India sees good potential in enhancing bilateral cooperation with Afghanistan in the small and medium enterprises, textiles and agro-processing sectors, the top commerce ministry official said here on Thursday.

Addressing a 12-member Afghanistan delegation organised by industry chamber FICCI , the Commerce Secretary, Mr Rahul Khullar said growth in imports from Afghanistan — at 16 per cent last year — was quite low. He said there was significant scope for greater co-operation.

Mr Khullar also emphasised that greater capital expenditure in Afghanistan's mining sector was a way forward for development.

On its part, the Afghanistan delegation lauded India's efforts in peace and rehabilitation in the trouble-torn country.

“In 2014, foreign troops will leave Afghanistan. We hope that India will help us bring peace, stability. We strongly support India's bid for permanent membership of the United Nations Security Council,” a spokesperson of the Parliamentary delegation, said.

Mr Vikramjit Singh Sahney, President, SAARC Chamber of Commerce and Industry, urged Afghanistan to engage more actively in the region to ensure its rightful place.

Mr Mohd Noor Akhbari, the spokesperson, assured Indian business about the safety of its investments in Afghanistan, and sought India's help in building its urban transport infrastructure and agriculture, mining and health sectors.

He also underlined the need for more scholarships to Afghan students to study medicine and engineering in India. The scholarships available today were in social sciences alone, he stated.

Multi-national companies looking to expand R&D centres in tier-2 cities: Study

Bangalore: To cut costs and contain attrition, Indian MNCs are moving into tier-2 cities, says a Zinnov study.

Consulting firm Zinnov in its study said that while 96 per cent of MNC R&D companies are located in cities like Bangalore, increasingly they are moving to tier-2 cities such as Ahmedabad, Jaipur, Chandigarh, Coimbatore, Vadodara, Nagpur, Pune and Thiruvananthapuram. Further, the study highlighted that the MNC R&D talent pool in India for 2011 was 204,196.

R&D talent
This R&D talent pool is growing at the rate of 9 per cent every year and is expected to reach 2.5 lakh by 2015. Mr Chandramouli C.S., Senior Director-Globalization Advisory, Zinnov, said, “MNCs started expanding to tier-2 cities due to advantages like higher catchment area, lower attrition, cost arbitrage, etc.”

Typically, tier-2 cities were a preferred destination for IT and BPO companies which were grappling with commercial real estate and attrition costs. This trend is being seen now with multinationals such as Dell, Nokia, Amazon and others who are looking at tier-2 cities that would be in addition to their existing centres in major cities.

Cost of living in tier-2 cities is 10-25 per cent lower compared to tier-1 cities and provide cost advantage of 15-40 per cent in commercial real estate costs. “Salary costs and other expenses go up in a tier-1 city over a period of time,” said Mr Manohar Joshi, Director –Systems, IonIdea Inc.

Fresh talent
Also, fresh talent pool in tier-2 cities is estimated to form 35 per cent of the Indian R&D workforce going ahead. In the tier-2 cities, work such as testing, level 3 customer support and bug fixing are being undertaken.

These typically tend to be lower level work in terms of profile but which is critical to a company's operations, opine analysts. The study also pointed out that companies are looking at a hub-and-spoke model wherein these R&D centres are closer to their manufacturing business like automotive.