Start up funds are going in for follow up investments in portfolio companies to avoid playing second fiddle to new investors attracted by low valuations

Fear of becoming minority players in their own portfolio companies is driving many venture capital firms into pumping in more money into them. This follows the almost rock bottom valuations for startup companies owing to the slowdown and cash flush VC firms and angel investors who are attracted to them.

VCs are looking to hold on to their stakes in these companies that have become prime targets for others, point out industry watchers.

The merger of Reliance Industries (RIL) and Reliance Petroleum (RPL) is likely to be earnings per share (EPS) accretive for RIL shareholders by 50 to 150 basis points, analysts have said.

The swap ratio of 1:16 represents a 3.5% premium to RPL’s share price on Friday (Rs 76.20 per share).

RIL bought back Chevron’s stake of 5% in RPL @Rs 60 —- the same price at which it was sold by RIL in 2007, giving promoters complete control of India’s largest private company —- not that Mukesh Ambani was particularly seeking it.

The swap ratio was more or less in line with street expectations, though it tilts a touch towards RPL shareholders.

Fear of becoming minority players in their own portfolio companies is driving many venture capital firms into pumping in more money into them. This follows the almost rock bottom valuations for startup companies owing to the slowdown and cash flush VC firms and angel investors who are attracted to them.

VCs are looking to hold on to their stakes in these companies that have become prime targets for others, point out industry watchers.

One route for this has been to co-invest along with new VC investors to prevent dilution of stakes.

Tata Steel's stock was up 5.6% to Rs 172.35 per share on Friday, a day the Sensex closed 0.71% down, after it announced consolidated results for the quarter ended December. The company posted a profit as against street expectations of loss at the net level.

Profit stood at Rs 813.89 crore after accounting for minority interest and share of profit of associates. This represents a 42.5% decline over the same period last year when the profit stood at Rs 1,415.54 crore. Hedging gains and better price realisation helped profits.

With index at 2009-low, growth at 6-year low, Dow at 12-year low & Re at all-time low, it's that sinking feeling once again

The good times will take a good long time coming back, it appears, what with GDP growth at a six-year low, Dow Jones breaking below 7000 (12-year low) and the rupee at record 52 levels.

On Monday, the Sensex shed 285 points to close at the 2009 low of 8607. It has lost over 1,000 points since Pranab Mukherjee rose to present the interim budget two weeks ago.

Experts see a further 1,000 points being sheared off before long. That would mean a breach of the intraday index low of 7697 hit on October 27 is at hand.

Tokyo  - The Japan market ended Tuesday morning trading lower with the key Nikkei index falling to the lowest level in four months at one point on lingering concerns over the US financial sector.

The benchmark Nikkei 225 Stock Average dipped 75.26 points, or 1.03 per cent, to 7,204.89.

The broader Topix index of all first section issues was also down 9.57 points, or 1.32 per cent, to 725.02.