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Showing posts from May, 2012

Can Facebook grow into its $100 Billion Valuation?

NPR has an interesting podcast on the topic which also describes various aspects of the Facebook ecosystem like marketing companies who pay Facebook users to 'like' their clients; automated fake Facebook accounts that are created to take advantage of such schemes.

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Logic behind Aditya Birla's acquisiton of Pantaloons

Businessworld has a quick analysis:
For the Future Group, the happy marriage means thttp://www.blogger.com/img/blank.gifhat Rs 1,600 crore out of the Rs 5,256-crore debt will be wiped off PRIL’s balance sheet, giving Future Group chairman Kishore Biyani a breather. “This is the first of the many steps to reduce the debt of the Future Group,” says Devangshu Dutta, CEO of Third Eyesight, a retail consultancy.

But is the union good for ABN, too? ABN’s business generates $4 billion in revenue, but its lifestyle business makes only $400 million. The new entity should change that for the better. ABN’s Madura Fashion is the largest premium-branded apparel player in India, with brands such as Louis Philippe, Van Heusen, Allen Solly and Peter England as part of its stable, and retails through 1,082 exclusive brand outlets, apart from being sold in more than 1,250 departmental stores and multi-brand outlets.

ABN has a distributorship tie-up with leading brand Esprit and it retails internationa…

The Business of Parking

Businessworld has an article featuring VC-backed Central Parking Services and other local and international players (like Australia's Secure Parking, Malaysia's Tenaga Parking, etc) who have entered this market.
Setting up a parking lot for around a 1,000 cars costs nearly Rs 1 crore, of which Rs 70 lakh goes towards the technology (sensors, cameras and security systems, parking software, etc.) while the rest is used to put up signage, speed breakers and ground-level offices, etc. Besides the fixed costs, the major operating expenses for these companies include staff salaries, training and maintenance.

On an average, 45 people are employed in the parking space of a 1.2 million sq. ft mall. But some malls rely more on technology and less on people. For instance, the Number One MG Road mall in Bangalore has completely auto-pay stations, and employs fewer than 20 people in the parking lot.

On the revenue side, on average, a mall charges Rs 20 per hour, which goes up to Rs 50 on week…

Indian Private Equity at the Crossroads: A LP View

Anubha Shrivastava, Managing Director (Asia), CDC - one of the oldest investors in Indian PE/VC Funds - highlights the problems facing the industry in a Business Standard article .
The twist in the tale is that many investors have generated single-digit net returns from the India portfolio. The 2004, 2005 and 2006 vintages that should have delivered outstanding returns have, in fact, had patchy returns at best. While funds have gone on to raise their second and even third funds, investors and returns are languishing. The root of this problem lies in the fact that the understanding between PE and the businesses was set incorrectly in 2004. PE was regarded by businesses as just another source of financing, alongside the public markets and bank debt. The PE industry did not correct this understanding. With capital rushing into PE in India and immature teams being set up to capitalise on the capital flow, a number of mistakes have been made by an immature start-up industry. Thes…

Deal Alert: Everstone Capital and Helion Venture Partners invest in Bangalore based salon chain R& R Salons (“YLG”)

From the Press Release:

Bangalore-based salon chain R&R Salons Private Limited (“YLG”) today concluded its second round of private equity funding. This round saw participation from Everstone Capital and its existing investor, Helion Venture Partners. Avendus Capital was the sole financial advisor to R&R Salons on this transaction.

R&RSalons runs the “YLG” brand of salons, with Twenty salons in Bangalore and Pune, along with its Beauty Academy, ISHA. The proceeds of this fund raise will be used towards YLG’s organic growth plans and expand into major cities across thecountry.

Mr.Sameer Sain, Co-founder and Managing Partner at Everstone Capital, said “The Beauty and Grooming services space is growing rapidly and is highly fragmented. YLG has built a strong regional brandand our goal is to make it a leading national player. A combination of a strong management team and Everstone's strong operational capability and growth capital give us the confidence that YLG can truly beco…

Profile of Hatsun Agro Founder

The Hindu has a profile of R.G. Chandramogan, founder of Chennai-based Hatsun Agro Products, best known for it Arun Icecream (launched in the 1970s) and Arokya Milk (1980s) brands.
While frozen dessert lovers were lapping up whatever came from the stables of Arun, Chandramogan busied himself with another venture — the dairy business. In 1995 he started Arokya milk. “We were procuring milk for our ice creams and so this idea came about. Today Arokya sees an annual turnover of Rs.1,300 crores. We also manufacture butter, milk powder, ghee and curd. We are associated with 3,50,000 farmers and buy milk from 8,000 villages. We operate from nine different factories and our people travel 4,20,000 km to collect and distribute milk,” he adds. Hatsun dairy products are available across the country. Hatsun has its dairy plants in Kanchipuram, Palacode, Salem, Madurai, Belgaum, Honnali.

...Hatsun produces 18 lakh to 20 lakh litres of milk per day. Twelve lakh litres are used up for milk and milk p…

Deal Alert: TaxiForSure raises venture capital from Accel, Helion

From the Press Release:

Serendipity Infolabs Pvt. Ltd., which runs the online taxi booking site TaxiForSure.com, has raised venture capital funding from Accel Partners, Helion Venture Partners and Blume Ventures. As part of the transaction Anand Daniel of Accel and Ritesh Banglani of Helion have joined the board of the company.

TaxiForSure.com was founded by IIM Ahmedabad graduates Raghunandan G and Aprameya Radhakrishna in June 2011. As frequent business travelers, both co-founders used to find it extremely difficult to book taxis, and even after booking there was no guarantee the cabs would arrive at the right time and place. Co-founder Aprameya Radhakrishna said, “On researching the market we found that on the one hand consumers struggle to find taxis reliably, and on the other taxi operators and drivers struggle to get enough customers every day. We realized that technology can play an effective matchmaker in this market”.

Anand Daniel of Accel Partners said, "As a consumer I ha…

Deal Alert: Lok Capital and Acumen invest Rs. 7 Crore in Hippocampus Learning Centres

From the Press Release:

LokCapital, one of the largest dedicated funds in India for businesses focused onserving the lower income and base of the pyramid (BOP) customer segments and Acumen Fund, a pioneering nonprofit global venture firm addressing poverty in South Asia, East and West Africa, today announce Rs. 7 crore investment in Hippocampus Learning Centres (HLC), a for-profit rural education service provider in India. This is Lok Capital’s and Acumen’s first investment in Education and marks the launch of their respective education portfolios. Based in Karnataka, India, HLC provides affordable, quality education by employing and training local female teachers who coach students between the ages of 3-12 in both pre-school and primary instruction.

Education has traditionally been a public sector service but public education systems globally have struggled to meet the learning needs of low-income populations. In a rapidly developing economy like India, more than 50% of children betwee…

The promise of "in app" advertising

Businessworld has an article explaining how and why there's an ad for SBI in the free version of Angry Birds that you download on your tablet/mobile.
In a country obsessed with mobile devices, cool new apps on smartphones or tablets are often part of watercooler conversations. This viral growth of apps is creating an ecosystem for a new genre of mobile app advertising. Apps such as Angry Birds — which has registered over 7 million mobile downloads in India across platforms such as Android, iOS and BlackBerry — are creating captive audiences for brands.

...Sponsored advertisements allow interactivity that advertisers hope will lead to engagement and brand building. The advertisement rates depend on the number of downloads, time spent on the game, among other things...The usual revenue split is that for every Rs 100 earned through in-app advertising, Rs 30 goes to the app store, and of the remaining Rs 70, 60 per cent or Rs 42 goes to the publisher and the rest goes to the advertisin…

Deal Alert: Acumen Fund invests Rs.9-Cr in agri services firm Basix Krishi

Acumen Fund, a pioneering nonprofit global venture firm addressing poverty in South Asia and across Africa, today announced an equity investment of INR 9 crores (~$2M) in BASIX Krishi Samruddhi Limited (BASIX Krishi).

BASIX Krishi delivers productivity enhancing extension services—such as soil testing, seed treatment, vermicomposting, pest management and good harvesting practices for crop farmers; and livestock vaccination, para-vet services, fodder demonstration and milk market linkages for dairy farmers. The company provides this service to its customers through a network of trained Livelihood Service Providers who visit each customer at least twice per month. Incorporated as a public limited company in April 2010, BASIX Krishi is part of the BASIX Social Enterprise Group promoted by Vijay Mahajan, an accomplished social entrepreneur who is considered a pioneer in the areas of financial inclusion and rural livelihood promotion.

“The BASIX Krishi model can increase smallholder farmer …

The Economic Version of the Ant and Grasshopper

Arjun Parthasarathy has this interesting take on this ancient fable (ironically by Greek author Aesop) via blog post at InvestorsAreIdiots.com
The European nations who have been playing while the world was working are struggling to come to terms with the issues facing them. The normal way of life with state support, low number of working hours, extended summer holidays and assured jobs is a thing of the past and the normal European is having tough time adjusting to the new environment. Jobs are scarce, government is bankrupt and people find they have to work hard for their money. It is no wonder that the Greeks and the French are rejecting austerity and it is most likely to spread to Spain, Italy and Portugal as well. However, rejecting austerity will not help the Europeans in any way and it is a long hard grind to come back to normalcy.

...India is also a part of the ant and the grasshopper story. In India the ant is the people who work hard and save money for the future. The governmen…

Rahul Bhasin on GAAR

The proposed General Anti-Avoidance Rules (GAAR) in the Indian budget are a short-sighted move that will impact foreign capital flows - including private equity - into the country, says Rahul Bhasin of Baring Private Equity Partners India, in an interview to The Mint.
I think what we seem to have created for ourselves in an environment where this global growth is slowing and where we’ve had an opportunity to stand out as the beacon of light in terms of growth and opportunity, I think that we have conspired against ourselves and have lost what could have been our moment in the sun.

...More importantly, from a practical perspective one should look at what the consequences of something like this would be over the next 10 years or so. We are a country running a huge current account deficit, we need to finance it. You need to make sure that you have capital flows in place so that there is no amount of sudden discontinuity in that process because that could prove very expensive.

...I think th…

Deal Alert: RVCF acquires 11% in cardiac care hospital Frontier Lifeline

From the Press Release:

Jaipur-based Rajasthan Venture Capital Fund (RVCF) has acquired 11% equity stake in Chennai based cardiac care hospital Frontier Lifeline Private Limited for an undisclosed amount. RVCF invested in the company through its Rs 200 Cr SME Tech Fund which invest pan India in IT, education, , healthcare, agro products, auto components and other growth sectors. Girish Gupta, CEO of RVCF will joining the board of the company.

Established in 2003, the company is primarily engaged into running cardiac specialty hospitals at various locations including Chennai, Parumala (Kerala), Thrivalla (Kerala). The company is implementing its Contract research, Tissue engineering and Educational initiatives through its integrated healthcare park “Frontier Mediville” located around 45 kms from Chenna in 106 acres. The company is promoted by Padmashree Dr. KM Cherian who is considered to be the pioneer in pediatric cardiac surgery in India, and has held prestigious positions in India an…

Deal Alert: NYLIM Jacob Ballas invests Rs 200-Cr in Karaikal Port

From the Press Release:
Karaikal Port Private Limited, a subsidiary of Chennai headquartered MARG Limited, one among India’s fastest growing infrastructure companies, today announced that NYLIM Jacob Ballas India (FVCI) III LLC (“NYLIM-JB Fund”) has invested Rs. 200 crores (by way of primary and secondary investments) in MARG Karaikal Port for a minority stake. The funds will be used for the MARG Karaikal Port expansion plans which will enhance the port’s capacity from the already planned expansion of 21 MMTPA to 28 MMTPA. 
MARG Karaikal Port, a premier, hi-tech, all weather port on the South East coast of India is notably the only all weather, deep water, multi-commodity port between Chennai port and Tuticorin port and is strategically located in the middle of this 680 km coastline, which makes it the new gateway to the state of Tamil Nadu. Its combination of strategic location, state-of-the-art equipment and world-class infrastructure makes it the port of choice for industries and …