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Showing posts from September, 2009

"SKS struggling with balance between social & commercial goals"

Forbes India has an article, accompanied by an interview with founder Vikram Akula, on how SKS Microfinance is struggling to strike a balance between its soscial and commercial goals.
Ever since private capital began to course through its veins, the culture at SKS too has started transforming. With Akula often visiting the US, the second-rung leadership which ran the company brought in lot more changes. Somos Krishnan, who spent nearly a year and half at the MFI, recalls how the informal mojo gave way to the stifling air of buttoned-down formality. “We often had debates about whether self-congratulatory emails on reaching certain milestones (number of clients) were the best ways to motivate employees.”

...“Professor Yunus believes microfinance should be a social business — you get social capital and you return no profit. Grameen Bank reaches 7 million clients and that’s amazing. On the other hand, it took Professor Yunus took 35 years to do that… Can you imagine how many generations it …

Deal Alert: Manipal Group acquires Kerala-based education firm Tandem

Edited excerpts from the press release:

Manipal K-12 Education has acquired Tandem, a Kerala-based education and preparatory services provider. Tandem has a network spanning 39 centers in Kerala, Tamil Nadu and one overseas centre in Dubai and offers services primarily targeted at segments ranging from high school to the corporate training level. Centrum Capital was the sole advisor for this transaction.

Manipal K-12 currently has a chain of 30 Edurite tutorial centers in Karnataka and 6 in Kerala offering coaching for high school and entrance examinations.

Can't afford an IPL team? Buy one at KPL or MPL

Business Today has an article, titled "IPL Copycats", on new state level 20:20 teams in Karnataka and Maharashtra.
The KSCA, however, is not the first to have launched a 20-20 league of their own. The Maharashtra Cricket Association (MCA) has already done it, roping in the Sakaal Media group for the Maharashtra Premier League (MPL) in April-May this year. The MPL, with a prize money of Rs 10 lakh, had eight franchisees who played a total of 31 matches in 14 days. But the player of the tournament had to be content with two wheels, not four: a Yamaha motorcycle. The total cost of organising and playing the games was a measly Rs 1 crore.

Just as in the IPL, the MCA teams, too, have catchy names—Devgiri Emperors, Sinhagad Supremos, Sindhudurg Sailors and Torna Tigers. But, unlike the IPL’s mish-mash, no players from other states played in either league. Also, the players in the local leagues have three-year contracts and a franchisee owner has to buy all the 14 players within a bu…

"India to lag in outbound M&A action"

In an article for Business Today, HBR Senior Editor Anand P. Raman says companies from China, Brazil, and Russia - which are cash-rich and less leveraged than Indian companies - will take the lead in future outbound M&A transactions.
Chinese and Latin American companies will use M&A to internationalise rather than globalise. They will try to buy several businesses in the same country or in neighbouring countries instead of hankering after one company with worldwide operations...In 2008, Brazilian companies acquired 23 more enterprises to create pan-Latin American leaders, or multi-Latinas.

Three, companies will acquire more small and midsize businesses overseas instead of acquiring giants. Indian companies may not have much of a choice; they’re busy digesting the big companies they took over before the financial crisis erupted and so will focus on small and strategic acquisitions. The shift has also become perceptible in China since global acquisitions left both TCL and Lenovo w…

Profile of L&T's strategic investments

What's common to Kalindee Rail Nirman, Astra Microwave and City Union Bank? Answer: They have a common strategic investor: engineering conglomerate L&T. Extract from the Business Today article on L&T's investments:
The big imponderable, of course, is how ‘strategic’ are some of these purchases; do L&T’s ambitions stop at the vendor-relationship level, or would it consider going the whole hog and acquiring a majority stake in any one of these companies? Consider Kalindee Rail Nirman (Engineers), for instance, which executes signalling & telecom and gauge conversion projects for the railways. L&T’s stake in this company, via subsidiary L&T Capital Co, is precariously close to the 15 per cent threshold, at 14.9 per cent. L&T, meantime, has been sharpening its focus on the railways, and in the recent past has bagged major orders in track-laying and electrification. An acquisition of Kalindee will prove a perfect fit, and also assist a quick ramp-up in th…

Five faultlines in education

Extract from the speech of Manish Sabharwal, Chairman of TeamLease, at a discussion organized by Businessworld,
There are basically five faultlines in education but the interesting part is that these five faultlines — quantity versus quality, repair versus prepare, price versus cost, funding versus delivery, and excellence versus inclusion — don’t only apply to higher education...How we handle the trade-offs in these five faultlines will actually decide the difference (between growth and underdevelopment).

...Finally, we have to deal with excellence versus inclusion. John Gardner, then secretary of education, US, asked a profound question: can we be equal and excellent at the same time? That’s an important question in the context of reservations, but now I think about it in terms of quality versus quantity — the entry gate versus the exit gate. So, you can be like the IITs and IIMs, with tight entry gates and wide open exit gates. Or you could be like the Chartered Accountants’ Instit…

Vinod Khosla ramps up bet on cleantech

bloggingbuyouts has an article on Vinod Khosla's two newly raised cleantech funds.
While other VCs have frowned on so-called science experiment investments that explored unproven and technically difficult technologies, Khosla sees these types of investments as a core function of venture capitalists that was somehow lost, according to the New York Times article. In addition, many Silicon Valley venture capitalists have turned their backs on cleantech investing, according to VentureBeat. Venture capitalists fear that cleantech companies generally require large amounts of startup capital. High-funding demands are a clear obstacle during a time of wholesale shrinkage in the VC sector.

For his part, Khosla has not shied away from cleantech to date and, rather, has poured his own money into his own private investment fund. In that still running fund, Khosla pledges profits to charities. In the present fund, Khosla is looking for pure profits and is accepting limited partners -- that is, o…

China vs. India in Africa

Forbes India recently had a cover story on the race by Indian and Chinese companies to set up a foothold in the Dark Continent. The package includes interview with executives with some of the early movers - including Apollo Tyres, NIIT, Tata Steel and Skipper Energy - talk about their experience and an interview with Professor Vijay Mahajan of The University of Texas at Austin and author of the book Africa Rising.
One slice of the opportunity is a middle class numbering anywhere between 350 million and 500 million, larger than India’s. And per capita income is growing. The continent clocked an impressive growth rate of 5.2 percent in 2008. Of course, with recession and a crash in commodity prices, the growth may taper to 2 percent. But its trade links with China and India hold out hope that it could recover in tandem with these countries, says a recent article in the Harvard Business Review (HBR). Besides (as Professor Vijay Mahajan) says, “When you look at [opportunities in] the world…

Interview with IDFC PE's Luis Miranda

Outlook Profit has an interview with IDFC PE CEO Luis Miranda on recent trends in the PE space.

On Increased Due Diligence in the new environment...
We had made an investment in a company some years back assuming that gas would be available for that particular power plant. When we did the technical due diligence, the main concern was will the gas be available? We spoke to the company, we spoke to GAIL, the gas producers, the ministry, electricity board, and everyone said supplies would commence. But the reality is that the gas never came. Now it’s a separate issue that the investment actually was a very profitable one for us. But now we may not take that for granted and will seek solutions rather than just assurances. Today, possibly, we would not made that investment and, as a consequence, also that kind of returns. So, if a company says that traffic will grow at ‘ x’ amount a year, we will do a bit more of our own analysis and question that more.

...On IDFC PE's exit from GMR Energ…

Deal Alert: Sutures India to raise Rs. 35-Cr from Evolvence India Life Sciences Fund

Evolvence India Life Sciences Fund (EILSF) has committed to invest upto Rs. 35 crore in Sutures India, a Bangalore-based company specializing in the manufacture of surgical consumables.

Sutures India manufactures a range of wound closure products such as natural and synthetic absorbable and non-absorbable sutures, surgical needles, staples, tapes, hernia meshes, and disposable surgical gloves. For more information on Sutures India, visit http://www.suturesin.com

Other companies that the $150 million EILSF has invested into include Hyderabad-based pharmaceuticals firm Gland Pharma, Bangalore-based oncology hospital firm HealthCare Global Enterprises and Chennai-based pharmaceuticals company Anjan Drugs.