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Indian hospital chain Fortis Healthcare will buy 23.9 percent of Singapore’s Parkway Holdings  from U.S. buyout firm TPG Capital in an expansion drive into Asia and the Middle East.

The $685 million deal will give Fortis a foothold in Singapore and Malaysia and make it the biggest private hospital network in Asia, it said.

The move continues an overseas acquisition push by Indian companies looking for new markets and know-how. Top Indian mobile carrier Bharti Airtel is in talks to buy the African operations of Kuwait’s Zain for $9 billion.

Fortis intends to move into other parts of Asia and the Middle East, Chairman Malvinder Mohan Singh told reporters.

“Indonesia, the Philippines and Thailand are markets we would like to evaluate,” Singh told Reuters in Singapore.

Fortis has no immediate plans to raise its stake in Parkway and planned to work with the Singapore firm in expanding across the region, added Singh, who will be nominated Parkway chairman.

Fortis will be the largest shareholder in Parkway, with a stake slightly higher than the 23.32 percent held by Malaysian state fund Khazanah Nasional Bhd, according to Parkway’s website.

Fortis’ purchase follows its $187 million acquisition in August of 10 hospitals from unlisted Wockhardt Hospitals.

“It makes more sense for Fortis to acquire a strategic stake in Parkway than to go for a full-fledged acquisition as it would mean lower risk as well as lower cost,” said Sapna Jhawar, a healthcare analyst with Mumbai-based Sharekhan.

Full news here

Above picture of Fortis hospital, Noida courtesy: Neytri

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India’s gold obsession never ends

At a conservative estimate of 15,000 tonnes, India’s privately held gold reserves, at present prices, are valued at $550 billion – nearly 40 per cent of India’s stock market capitalisation of $ 1.4 trillion, reveals a report from HDFC Securities. India’s net retail investment in gold has also doubled from 90 tonnes to 200 tonnes over 2003-08 and is now a $7 billion market. HDFC Securities analyst Anupam Gupta expects that a 1 per cent shift in savings from bank deposits to gold can add 4 per cent to India’s annual gold demand.

India’s obsession with gold is well known. Accumulated over generations, India’s privately held gold reserves are estimated at 15,000 to 25,000 tonnes. At present prices, this is valued at $548-913 billion and can act as a potent driver to sustain the wealth effect in India. While jewellery remains the dominant mode of possessing gold, India’s net retail investment doubled to 200 tonnes in 2008 from 90 tonnes in 2003, reflecting a marked shift in consumer attitude towards gold as an asset, the report said

Another way to look at gold ownership in India is to compare it to annual savings patterns. Indians purchased 660 tonnes, or $19 billion, of gold in 2008, which formed an approximate 15 per cent of physical savings and 5 per cent of total savings. “This implies enough headroom for growth because attitude toward gold ownership changes from jewellery to investment. As attitudes change, we expect Indians to open up to the idea of owning gold as an investment, rather than an asset,” Gupta said.

Gold loans also present a huge opportunity. Even if banks tap 5 per cent of average private gold reserves of 20,000 tonnes, this translates to a market size of $37 billion, Gupta said. Banks and non-banking financial companies (NBFCs), such as Manappuram General Finance and Muthoot Finance are expanding their network to tap into this fast-growing and underserviced market.

News source: MydigitalFC

Picture source: CometoIndia

Previous articles on Gold & India
RBI buys 200 tonnes of gold from IMF
Joy Alukkas to open world’s biggest jewellery shop in Chennai

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We are already 6 days into the new year.  I dont see much changes happening around and wonder why people blew up so much money boozing, eating, partying away and on firecrackers to bring in the new year.  The first day of the new year was the same.  The sun rose in the east, it felt like just another day. Anyway, if you ask an economist, they will say that its all these foolish spending that fuels the economy.

Generally, when asked for resolutions, i always maintain that “my resolution for this year is to have no resolutions“.  But then i make my secret list every year and work on them.  At the end of the year, i do an analysis to see if things went according to plan or not.  I hardly manage to accomplish around 20-30% of my targets every year and i realise that its a pathetic performance.

This year’s targets are also ambitious (as always).  Not sure if i can make any significant dent in it, but lets see.

Reading a lot is one of the priority this year and am simultaneously reading 2 books, not to mention magazines and other work relate books that i read.

Hope to be much more regular in blogging this year.  Hope the stock markets remain depressed all through the year and give me option to buy lots of good stock at cheaper prices.  Since my investments are for the longer term, i dont mind a few more years of depression / recession.

Its only when there is blood on the streets that you manage to find the best companies to buy.

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The world’s fastest growing telecom market, India is getting too hot and competitive for the biggest player Bharti Airtel to handle.  After its aborted attempt to buy South Africa’s MTN which fell through due to regulatory issues, Bharti is now looking in the neighbourhood for an acquisition.

In a shift of strategy, Bharti Airtel, the country’s largest telecom operator, is close to acquiring a 70% stake in Bangladesh’s fourth largest mobile operator, Warid Telecom, for close to $900 million.

The deal, likely to be sealed mid-January, comes three months after Bharti failed to secure a deal with South Africa’s MTN to become the world’s fourth largest mobile firm by subscribers.

Post-deal, management control of Warid Telecom would pass on to Bharti and Bangladeshi media reports say Bharti has submitted an investment plan of $300 million.

Bharti’s costly acquisition plan is an indication of how the stakes have risen in the telecom sector in the sub-continent; the offer is almost three times the $350 million DoCoMo paid in 2008 to buy a 30% stake in Aktel or TM International, the third ranked operator in Bangladesh.

Rest of the article here

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With signs of green shoots showing in economies worldwide, India  Inc’s appetite for overseas acquisitions got a fresh lease of life with Reliance Industries’ estimated $10-12 billion offer for a controlling interest in bankrupt LyondellBasell Industries.

The deal by India’s largest private sector company controlled by Mukesh Ambani, if closed, will make it one of the largest petrochemical outfits in the world. It will also be the second largest overseas acquisition by an Indian company, after Tata Steel bought Corus for $13 billion in 2007.

RIL has enough money power to make the deal happen. It has $4 billion in cash and $8 billion in treasury stocks, besides a favourable 0.35:1 debt-equity ratio. It also raised $660 million through treasury stocks sale recently.

In the year to October, Indian comanies acquired overseas assets worth $586 million, a sharp fall from the $13.06 billion in the same period a year ago, according to data from Grant Thornton Deal Tracker.

HSBC believes outbound activity will bounce back. About 70 per cent of HSBC’s pipeline is outbound transactions, which has remained the same as the previous year’s.

Tarun Kataria, managing director and head of corporate, investment banking and markets at HSBC, says India is sitting on the cusp of rapidly growing cross-border M&A activity.

“Indian firms are now well capitalised, are trading at circa 20x multiples, offshore markets are trading at a discount to India and financing is more readily available to Indian corporates than to competing offshore acquirers.”

Rest of the news here