MC Insider: New bank in the works, entertainment company off the hook, pharma deals, startup buzz and more

Amid WFH permits only being issued to essential workers in Maharashtra due to fresh restrictions, some companies are reluctant to allow remote working citing productivity issues. Two IT services firms in Navi Mumbai indicated to its employees that they will get relevant permission from authorities to ensure 100 percent regular office attendance. This got the anxious employees in a fix. A few pro-active ones then approached the local politician who reprimanded the company HR for this mandate. And, lo and behold, the tricky proposal of 100 percent attendance was quickly withdrawn.

A huge relief from the Ministry of Corporate Affairs may be on its way for this large Mumbai-based entertainment company. The ministry had launched a probe into this entertainment company last year. But now it has emerged that the complainants, which included a former independent director of the company, do not carry much weight in their allegations. Mind you, the complainant was also a senior bureaucrat of Maharashtra. This relief may now give the firm a similar breather in other investigations by agencies on alleged corporate governance issues.

A Delhi-based well-known former foreign banker, who is closely connected with the government and RBI circles, and comes with decades of hard banking operations experience, has begun preparations to realise his long-pending dream to float a bank. We hear that busy discussions are on with former colleagues and former regulators to tick all the right boxes and put the team in place should the regulator give the nod for his banking dream. The chatter is that the gentleman could emerge as one of the high probables to get the green signal given his strong banking experience, networking skills, and the ability to get investors on board. Fingers crossed for now!

The trailblazing investments by a well-known hedge fund in Indian startups has left large venture capital firms reeling, many of whom are shocked at the unprecedented speed of deal-making. The shock has even reached the office of a large Japanese investor, famous for its own deal-making speed! This investor recently lost out to this hedge fund while jostling for three deals because the firm from the land of the Samurai has consciously been trying to assess companies more carefully. But missing out on good companies just because it did not move fast and pay eye-popping valuations is making the Japanese fund reconsider, whether it should go back to its old strategy of quick large deals at crazy valuations. Did we say the startup funding party has started?

As a swathe of Indian startups are expected to hit the public markets this year, the anticipation is driving founders and investment bankers to make wild pitches. One well-known founder of a unicorn is currently raising funds at a $2 billion valuation, while simultaneously saying the company will go public at $4 billion in ‘pretty’ much three months’ time. In three months, bankers are expecting a bigger valuation jump than in the last decade, with no substantial change in underlying fundamentals of the company. While the company and its founder are well respected, the aggressive IPO valuation expectation is also making some people nervous, who are wondering whether the bubble will burst soon. Watch this space for more!

Buzz in the market is that a few pharma companies are exploring routes to amend their existing structure via demergers, splits and carve outs. Why, you might ask? Well, we hear the long-term strategy is for some of these assets and verticals to change hands over a period of time and they are too big to divest as one combined unit. Deals are easier when the businesses are smaller and niche and also smoother when there are succession issues and the next generation isn’t exactly that keen to take the business forward.

There is considerable excitement in the commodities segment, including copper, steel and aluminium, what with robust sales and price hikes every few weeks or so. The sector seems to be turning around and when the times are good, the chances of a revival in stressed assets is also high. One such firm based in the west seems poised for a turnaround with a big debt rejig plan being discussed which could include the entry of a white knight. More on this soon…

Our deal street birdies tell us that this MNC’s plans to exit one of its non-core, consumer focused assets may have hit a valuation hurdle. The target in question was being chased by a clutch of top private equity funds and we shall wait and see who blinks first. For now, the pause button seems to have been pressed. This transaction was being keenly tracked by a few desi peers who are waiting for a valuation benchmark so that they can go back to their strategic drawing board.