Peepul Capital LLC, a Hyderabad-based private equity fund, is likely to invest anywhere between Rs 500 crore and Rs 1,000 crore in debt-ridden Deccan Chronicle Holdings Limited (DCHL), which publishes English newspapers Deccan Chronicle, Financial Chronicle and Asian Age, and Telugu daily Andhra Bhoomi, according to people privy to the development.
When contacted, Peepul Capital LLC managing director C Srinivasa Raju declined to comment on the quantum of the investment. Raju is the first potential investor to evince interest in investing in DCHL, which has over Rs 1,500 crore debt as per Registrar of Companies’ filings.
“Our investment in DCHL will be from our $700-million (including $100 million of own money) fund. Our firm has both dollar and rupee funds because there are constraints in terms of foreign and Indian ownerships. So, it (investment) will be a combination of both the currencies,” he told Business Standard.
Peepul Capital, which typically commits between $15 million and $25 million of equity in each transaction, has so far invested $450 million from its fund.
These include Hyderabad-based animation company DQ Entertainment, multi-lingual news agency IANS India Private Limited, Associated Broadcasting Corp, which runs regional television news network TV9 and Visage Media Services, a strategic partner of Getty Images.
Replying to a query on the reason to show interest in DCHL, Raju said, “We are all investors. We are looking for an opportunity.”
Raju, who worked as the chief operating officer of Satyam Computer Services Limited and also as the first chief executive officer of Cognizant Technology Solutions Corp, said whether his investment in DCHL would exclude Deccan Chargers, the IPL franchise team that the publishing house owns, was a little bit more complicated.
“The lenders wanted to first sell Deccan Chargers and then stabilise the company as it needs funding. Though they (lenders) also tried to find people who are interested in buying Deccan Chargers and investing in the newspaper, I think they will first sell the Chargers,” he said.
According to the Ministry of Corporate Affairs’ filings, ICICI Bank leads the league of lenders to DCHL with Rs 610 crore, closely followed by IDFC and Future Capital Holdings (Rs 170 crore), YES Bank (Rs 50 crore), Axis Bank (Rs 100 crore), Indian Overseas Bank (Rs 70 crore) and Canara Bank (Rs 75 crore).
“I think the investment process into DCHL will take a long time because they don’t have a balance sheet. Unless there is a balance sheet no fund can invest. They, probably, will call for expressions of interest from three to four people like us. My reading is it will take at least three to six months from now,” Raju added.