News Corp exits Hathway; Khazanah offloads Yes Bank shares

At least two foreign investors, global media conglomerate News Corp and a Malaysian government arm, Monday exited from their two separate Indian investments in deals totalling about Rs 1,000 crore.

New Delhi: At least two foreign investors, global media conglomerate News Corp and a Malaysian government arm, Monday exited from their two separate Indian investments in deals totalling about Rs 1,000 crore.

At the same time, UAE-based telecom major Etisalat, which recently made public its intention to exit India, also said today that it has started proceedings for winding up operations of its Indian venture.

Making it a day full of deals, the foreign entities also made fresh investments in at least two Indian firms, but the total size of these deals was smaller at about Rs 550 crore.

However, it was the exit announcements -- media baron Rupert Murdoch-led News Corp from Hathway Cable (about Rs 360 crore) and Datacom and Malaysian government's investment arm Khazanah from Yes Bank (about Rs 550 crore) -- that caught the attention.

Also, these deals came close on the heels of global banking giant Citigroup selling its holding in domestic financial services giant HDFC (for about USD two billion), Singapore government's investment arm Temasek paring its stake in ICICI Bank, and a few private equity players selling shares of HDFC as also Kotak Mahindra Bank.

The market experts are mostly attributing these deals to mostly the foreign entities cashing on their investments in India, given a sharp rebound in their valuations in past few months. After falling by over 25 percent during 2011, the stock market valuations in the country soared by about 20 per cent in the first few weeks of 2012.

Also, the foreign entities having sold stakes in recent past continue to have significant exposure in India despite these recent deals. Also, it has been foreign investors only, that have acquired most of the assets sold by overseas firms.

Exiting its investment in Indian cable operator Hathway Cable & Datacom, News Corp today sold its entire 17.3 percent stake for Rs 358.39 crore to two foreign funds, Macquarie Bank Ltd and Providence Equity Advisors.

News Corp held this stake in Hathway Cable as a promoter entity, through a group entity Asian Cable Systems Pvt Ltd. The reasons for News Corp offloading its holding in the company could not be ascertained immediately.

Still, News Corp continues to have a significant India presence, including in media and entertainment businesses.

The sovereign investment fund of Malaysian government, Khazanah Nasional, today sold its entire 4.17 percent holdings in private lender Yes Bank for about USD 110 million (about Rs 550 crore), but it remains invested in many other Indian companies.

Khazanah has apparently monetised their investment of about five years at a phenomenal premium of 150 percent.

"The approximately USD 110 million transaction at market price, represents strong investment appetite for Yes Bank's stock, reinforcing our resilient business and financial model and significant future growth opportunities," Yes Bank chief Rana Kapoor said.

He further said that Khazanah was "keen to increase their stake to 10 percent by converting their portfolio investment into a strategic one. But since the RBI norms do not allow more than 5 percent stake by a single entity, they decided to monetise their investment".

In another share-transfer deal, US-based private equity firm Apax Partners today sold its 12.67 percent stake in leading hospitals and pharmacy chain operator Apollo Hospitals Enterprise for Rs 1,034 crore to its own FII sub-account.

Among the inbound foreign investment deals announced today, global private equity firm Warburg Pincus and International Finance Corp (IFC) made an investment of USD 50 million (over Rs 249 crore) in Au Financiers, a non-banking financial company.

In another deal, industrialist Anil Ambani has sold nearly half of his 15 percent stake in NICE Ltd, an entity developing Bangalore-Mysore infrastructure corridor, for over Rs 300 crore to a Mauritius-based fund affiliated to global financial services giant JP Morgan.