http://www.vccircle.com/500/news/edelweiss-elephant-capital-in-race-to-buy-axis-pe
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*Axis PE, which is spinning off from parent firm Axis Bank, has raised
about $150 million so far. *
The bidding process for acquiring Axis Private Equity Ltd is getting hotter.
Mumbai-based Edelweiss Capital, a leading diversified financial services
company and Elephant Capital, owned by the Burmans of the Dabur family, are
believed to be in the fray to acquire the private equity firm. Both the
firms have submitted their bids with Axis Bank, the parent firm, this week,
sources closes to the development told VCCircle.
E-mails sent to Gaurav Burman of Elephant Capital and Rashesh Shah of
Edelweiss did not elicit a response at the time of posting this article.
The Economic Times reported today that six bids had been filed and
identified four bidders as IL&FS Investment Managers, Aditya Birla Private
Equity, Shapoorji Pallonji group and US-based Darby Private Equity.
Axis PE, which is in the process of spinning off from parent firm Axis Bank,
has raised about $150 million for its Axis India Fund so far. The plan of
spinning off as a separate entity was termed as a strategy to win the
confidence of offshore limited partners, who were earlier concerned about
the possible conflict of interest between the bank and the PE arm.
When contacted, Alok Gupta, MD& CEO, Axis PE, declined to comment on the
development. In response to a mail sent to Shikha Sharma, MD & CEO, Axis
Bank, a spokesperson said, the bank is unable to provide any details in this
matter. The valuation details are not known yet.
According to an analyst, the possibility of a management buyout cannot be
ruled out. “In the Western world, spinning off the arm as a separate PE
entity and being acquired by the management is not rare while in India this
trend is yet to happen.”
Instead of selling to the highest bidder, the Axis Bank management is likely
to choose the player who fits well with the Axis’ portfolio, an industry
source said. “The bank has decided to spin off the PE arm to bring
confidence among the LPs. So they will be cautious to sell the firm to the
right acquirer,” he said.
Pankaj Dhandharia, National Director, Industrial & Consumer Products at
Ernst & Young, said, "There is much interest in the deal as the successful
bidder will get a better platform in the PE space through acquiring this
reputed firm. It is the first time in India that a PE arm is kept on the
block."
Elephant Capital (formerly Promethean India Plc), headed by Gaurav Burman
and Mohit Burman -- was listed at the AIM market in London in 2007. The PE
firm raised £50 million in early 2007 through a public float at AIM. Its
investments in India include NIIT, Mahindra Forgings ($3.31 mn), Obopay,
Nitco Ltd ($2.26 mn), EIH ($9.77 mn) besides recent portfolio firm Global
Cricket Ventures ($10 mn). It has acquired a minority stake in Amar Chitra
Katha Pvt Ltd recently.
Last year, Edelweiss had made first closure of its Edelweiss Special
Opportunities Fund LLC (ESOF), at $105 million. The fund, sponsored by
Edelweiss Capital’s overseas alternative asset advisory arm EAAA LLC, is to
invest in transactions presenting special investment opportunities in India.
Edelweiss has a net worth of over Rs 2400 crore and a pre-tax profit of Rs
329 crore for FY09.
--
Regards
Hardik Shah
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