UK firm Caledonia to pump $200 m into India

The UK-based Caledonia Investment Plc plans to invest $100-200 million in the Indian market. This will account for approximately 5-10 per cent of the $2 billion capital earmarked for investments worldwide.

Highlighting the group's plans, Caledonia Chief Executive Officer Tim Ingram said, "We are keen to pick up stakes in the range of 10-15 per cent in mid-sized domestic companies, whose market capitalisation lies between $300 million and $400 million.

"Caledonia currently has 12 per cent stake in Alok Industries and smaller stakes in other corporates. Ingram further said within India, Caledonia is bullish on export-oriented industries such as textiles and sectors driving the growth of the internal economy like home finance.

Caledonia recently raised its stake in private housing finance entity, Dewan Housing Finance (DHFL), to 14 per cent from 2.14 per cent, through the placement of optionally convertible preference shares (OCPS).

DHFL's shareholders today approved the placement of OCPS worth Rs 53 crore on a preferential basis. These shares could be converted into equity shares of Rs 75 at the end of 13 months from the date of subscription.

Commenting on the Indian home finance market, DHFL Managing Director Kapil Wadhawan said, "We foresee a 30-35 per cent growth in business over the next five years. In 2005-06, our incremental lending has risen by close to 70 per cent.

Wadhawan said DHFL has, effective from March 1, increased its retail prime lending rate to 11.25 per cent, bringing the floating rate on loans in the range of 8.5-10 per cent. Consequently, the fixed home loan borrowers will have to pay a rate of 9.5-11 per cent.