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Showing posts from August, 2011

International hotel chains target mid-market

Extract from Business Today article
A range of leading global hotel chains have planned massive investments in India's midmarket segment - or hotels with a room tariff of around $100 (Rs 4,500) per night in big Indian cities - in the next four years. Starwood Hotels and Resorts Worldwide, which owns brands like Le Meridien and Sheraton, intends to set up 100 hotels in India by 2015. It already has 32, most of them five-star brands like The Luxury Collection, Le Meridien and W, but its current thrust is overwhelmingly on its midmarket brands like Aloft or Four Points by Sheraton. "India is our fastest-growing market after China," says Frits Van Paasschen, President and CEO, Starwood Hotels.

...Accor, another top global hotel chain, which at present has nine hotels in India under the brands Mercure, Ibis and Novotel, plans to raise the number to 90 by 2015. Though some of its five-star brands will also make their debut in India this year, Accor is pushing hard its budget an…

"Thought for Food"

Business Today has an article on the aggressive expansion by MNC food services firms like Sodexho and Compass Group in India's food contract and support services sector.

Venture Intelligence is the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports.

"A Stake In Everyman's Dreams"

Business Today has a profile of Ventureast's Micro Equity Fund which invests in a variety of small businesses that don't get looked at by traditional VC investors.

The fund has so far invested into companies like Akshara Print Forms Pvt. Ltd, a manufacturer of pre-printed business forms and stationery such; Murugesan Silver Casting Works, a manufacturer of jewellery based; Rex Miller Garments, a garment manufacturer; Studio Essential, a unisex salon and V Cube Automations, which markets a device that automatically turns off motors pumping water into overhead tanks when they are full.

"These entrepreneurs are often from the lower middle class, with limited savings and little parental help. Their personal assets are secured with banks against working capital loans. They also take personal loans at high interest rates to make up for the deficit," says Sarath Naru, founder and managing partner of VenturEast, a venture capital fund.

.."Suppose a microfinance instit…

"The good and the bad of IT firms listing in the US"

Extracts from article by Sudheer Kuppam of Intel Capital in The Mint

Investor frenzy around the anticipated future listing of other Internet category leaders, such as Groupon (deal-of-the-day site) and Facebook (social media), is at a level not seen since 2000. While some debate that this is a sign of a tech bubble, the fact remains that many of these business models have generated unprecedented revenue growth.

It seems US investors understand the dynamics of investing for growth versus profitability, to claim and retain a leadership position in any given category. The primary reason for considering a US listing for Indian Internet and social media companies is that US investors understand the risk-return profile of these deals and can price them better than Indian investors.

The US listings of Chinese Internet companies Dangdang (an online retailer), Renren (a social networking site) and Youku (a video site) have vastly exceeded expectations, and this data can now be used as a proxy b…

Profile of electronic security products firm Zicom

Economic Times has a profile of the entrepreneurial journey of the founders of listed electronic security technology firm Zicom Security Systems here

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in

Group Buying in Real Estate

Extract from The Economic Times article
Group buying is typically a good strategy, be it for travel deals or buying consumer durables, as it can help you get discounts ranging from 5% to 25%. More recently, companies such as Groffer.com and Home Buyers Combine (HBC) have taken the lead in extending this principle to real estate.

...Why do developers offer such attractive deals to group buying firms when they are unwilling to do the same for standalone buyers even as a bait during a slump? It's simple. Group purchasing brings a ready, not to forget substantial, cash flow to the developer and simultaneously generates business without him having to advertise any kind of discount. It's similar to the set-up that developers share with speculators who generally buy in bulk. Such investors are able to get discounts of 30-40% since they come in at a stage when the project has not yet started and typically pay 50% of the property's value upfront and in cash. Group buying companies p…

Interview with KKR 's Sanjay Nayyar on mezz funding

Extracts from the Economic Times interviewAs firms like Everstone and Goldman Sachs, or Apollo and ICICI get more active, we will see the growth of a mezzanine market.

We in KKR are in no hurry and will focus on quality deals. There will be an increasing need for alternate capital and we see that even the government is relaxing norms to facilitate capital-raising. We have just had the new takeover code, relaxation of ECB norms and we might see some headway on the FDI side too. These are all positives to ensure long-term capital flow into the economy.

We are dealing with promoter/companies with who you need to identify the best terms as they have many options. At the higher end of credits you have lesser bargaining power. But we make sure we structure the deal in a way that the company pays a minimum coupon, with some kind of floor to total returns and sharing some upside, driven by EBIDTA and equity. We find this as meeting both parties' objectives. So we have invested in companie…

Deal Alert: Multiples invests in drilling equipment firm Sara Sae

Edited excerpts from the Press Release

Multiples Private Equity has made an investment in Sara Sae Pvt. Ltd. (earlier know as NOV Sara), a Dehradun-based manufacturer of drilling equipment. The financing will be used for the buyout of the 76% held in the company by National Oilwell Varco (NOV) in the company and to fund its growth plans. Sara Sae will enter the oil field equipment services business and also expand into other high potential product lines. Avendus Capital was the financial advisor to Sara Sae and its promoters.

Founded by its Chairman V.K.Dhawan in 1980, Sara Sae manufactures hi-tech drilling equipment and jack-up rigs like BPO Acculators, hydraulic tongs, hammer unions and swivel joints. The company has manufacturing facilities at Dehradun and Faridabad and a sales cum warehouse setup in Houston, USA. Exports account for more than 85% of the turnover of the company. In August 2007, National Oilwell Varco, which is a global drilling equipment company, acquired a 76% sta…

Deal Alert: Nexus Ventures leads $12-M 2nd round funding for Druva Software

Edited extracts from the Press Release:

Enterprise laptop backup and retrieval software firm Druva has received $12 million in a Series B round of funding led by Nexus Venture Partners with participation from existing investor Sequoia Capital India. The funding will be used to expand both the product offering and sales and marketing in North America, EMEA and Asia Pacific.

“As the explosion of data continues, and so does proliferation of endpoint device types and the mobility of the workforce, Druva has demonstrated a unique capability to address the challenges associated with enterprise backup and endpoint data protection,” said Jishnu Bhattacharjee, Principal, Nexus Venture Partners. “Druva's disruptive innovation reduces the storage footprint and bandwidth requirement for backup by orders of magnitude compared to other industry solutions. With wide adoption of its on-premise and cloud-based solutions, the fast-growing company is racking up an impressive list of reference custo…

Super Angels Pitch: 1000Lookz

New Fund Announcement: WestBridge Crossover Fund raises $500 million

WestBridge Capital today announced that it has successfully raised a new $500 million investment fund, WestBridge Crossover Fund, LLC. The Fund has been fully subscribed and is not open to new investors.

The new fund, a long-term investment vehicle, will invest in both public as well as later stage private companies. The WestBridge team’s four advisory principals – KP Balaraj, Sumir Chadha, Sandeep Singhal and SK Jain - have successfully invested in India for more than a decade, and enjoy a track record of success at the top of the Indian private equity industry.

Investors in the WestBridge Crossover Fund include leading university endowments and major foundations.

About WestBridge Capital:

WestBridge Capital is a leading investment firm, with a strong track record of success at the very top of the private equity industry in India. WestBridge is a long term investor and an active partner in companies that are market leaders with strong defensible business models, led by ethical and transp…

AZB & Partners, Ernst & Young, Avendus Top H1’ 2011 League Tables

Corporate law firm AZB & Partners continues to top the Venture Intelligence India League Tables as the Most Active Legal Advisor for both Private Equity and M&A deals – advising a total of 51 transactions - in the first six months of 2011. Ernst & Young topped the Most Active Transaction Advisor Table under Private Equity and Avendus Capital topped as the Most Active Transaction Advisor under M&A for the six months ended June 2011.

The Venture Intelligence League Tables, the first such initiative exclusively tracking transactions involving India-based companies, are based on volume of PE and M&A transactions advised by Transaction and Legal Advisory firms.

Private Equity Deals

Among PE transactions, AZB advised 30 deals during the period including Bain Capital’s investment in Hero Investments and the investment by GIC in GVK Energy. Other legal advisors who advised a significant number of PE transactions during the period include Indus Law with 22 deals and ALMT Lega…