MC Insider: D-Street debuts, succession planning at condom maker, an agency’s dilemma and more

Let’s start the proceedings with a turnaround story. We know how the markets love them. Ever since this southern conglomerate played the white knight and acquired a scam-hit company, the stock has soared… it's up 5x already! Some of the marque investors sold their holdings way too early, reminiscent of rats fleeing a sinking ship. But the family office of a north-based business tycoon held on and is now sitting on handsome gains. Now we hear that with the sharp rally in the stock, the family office is tempted to cash out and raise a neat sum of around Rs 300 crore. However, we wonder that with a faster than expected revival post the takeover, will this family office exit now or wait longer? After all, timing the market right makes the biggest difference.

Sell-side M&A mandates are triggered not just by the pain of debt, rosy valuations or immense pressure from a PE investor. Deals can also be triggered when Gen Next is not exactly keen to take up the mantle. Take the case of this desi condom maker. Lovemaking may or may not have been on the wane during the lockdown, but rumour has it that the firm, which has an ageing promoter at the helm of affairs, is facing succession issues. Word has reached a few amorous suitors and they have already sent out mating calls to this company which has a manufacturing unit in Maharashtra. Let’s see who gets some action!

This business tycoon known for his fine taste in all things art, food and culture recently took to Twitter to promote his daughter’s environmentally conscious, clean beauty and cosmetics brand which was launched during the lockdown. The daughter is married to a healthtech investor whose family started one of India’s oldest software firms, which was eventually acquired by a firm a third of its size! Coming back to the cosmetics brand, a tinseltown member responded on the social networking platform, expressing interest in trying out the new range. And pat came the tycoon’s response, who said he would be happy to send across samples. Talk about social media marketing, India Inc. style!

This private sector lender which has seen a dramatic rescue act driven by the government, may see a key exit soon. This senior hire, was handpicked by a former MD & CEO who failed to raise funds within time and win confidence of the regulator, and was taken on board to beef up the regulatory and compliance aspects of the troubled firm. We are not sure whether this gentleman’s proposed exit has anything to do with the current management. But what will be interesting to see is, if the new top brass scouts for a replacement or not, as governance has been this firm’s Achilles heel in the past.

There’s absolutely no doubt that pharma (read API) M&As have been the flavour of the lockdown era and promises to hog the limelight in the post-lockdown phase too. The city of pearls, i.e Hyderabad, has emerged as the deal destination for all big-ticket acquirers keen to gobble up pharma assets. It all started with the buyout of RA Chem Pharma which was purchased by PE major Advent. Now there are at least three live transactions with targets based out of Hyderabad and linked to the API segment. In all three cases, cash-rich private equity funds are on the hunt to beef up their pharma portfolio. Clearly, the de-risking from China following the pandemic is favouring Indian pharma promoters.

Not surprisingly, the sudden announcement of the RBI-driven LVB-DBS merger has irked major shareholders of the Chennai-based ailing private sector lender. They are crying foul at the structuring of the amalgamations scheme which has wiped out their equity. But the aggrieved parties are clearly not in a mood to wave the white flag! We now hear a clutch of big global consultancies have queued up before a major LVB shareholder to offer their services and prepare an independent valuation of the bank. This move comes after the advisory firms got wind of the shareholder's intent to strengthen the ongoing legal fight by citing a far higher valuation, which the latter believes is deserved by the bank. The need of the hour is an independent valuation report to be presented before the court of law. This key shareholder hopes to rope in a big name soon. Watch this space for more.

The recent raids by an investigative agency on politicians has ruffled many feathers. The latest buzz is that the agency may approach big names of the financial market too. We hear that the agency may call a big bull of the market for clarifications related to the probe into a security company. The concern is this: did investors raise the red flag when promoters of this company allegedly siphoned off money? However, the investigative agency is in a dilemma. While the big name investor is not an accused, how can he be summoned without making the markets nervous? It is indeed a delicate situation and we hear the agency might take a call on the tricky matter this week. Hmmm.

The financial services space, especially the heavyweights, had led the avalanche of fund raising activity during the early days of the lockdown period through QIP’s, preferential issue and a mix of other instruments. As we approach the end of the year, the segment is back in focus with many players eyeing listings. Investment banks are busy pitching to one of them, a housing finance player, backed by a global PE giant. If the plans fructify, it would be the first Indian IPO in this fund’s portfolio in five years. A second housing finance player backed by a desi PE player is all set to launch its IPO in January or February. The same PE firm is also scouting for a pre-IPO fund raising round for its small finance entity. On the other hand, a fourth entity, a micro-finance player is in the wait and watch mode for the time being.