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Showing posts from August, 2012

Corporate Japan's Craving For Indian Assets

(Click on the image for a larger view)

Note: The above data from the Venture Intelligence M&A Deal database includes only majority control transactions and does not include minority investments like Nippon Life's 26% stake acquisitions in Reliance Life and Reliance Mutual Fund.

From a recent Business Today article:

Arun Goyal, Minister (Economic and Commercial) at the Indian Embassy in Tokyo, says: "Today, 850 Japanese companies are active in India. There were only 200 around four years ago."

Small Japanese companies have woken up to India, too. Much of this interest in India is due to Japanese companies' disillusionment with China. Jun Hemmi, Executive Director of Edelweiss Tokio Life Insurance Company, who was the first CEO of Iffco Tokio General Insurance Company nearly a decade ago, says China is a challenge for Japanese companies. "We have not been best of friends," he says. "It's like an Indian company trying to sell retail products in Pakist…

Gloom Amidst the Boom: Why Solar Panel Cos are Wilting

From a Business Today article:
Though more and more solar energy is being produced in India - installed capacity rising exponentially from just 20 megawatts (MW) in 2009 to 980 MW by April 2012 - domestic solar panel manufacturers are in the doldrums. Just a couple of years ago, they were riding high. But now they hardly get any orders. All those setting up solar power plants prefer to buy their equipment overseas, especially from China.

... India's solar mission does stipulate some domestic sourcing, but it makes a significant exception. Solar panels are of two kinds: those made of crystalline silicon, and those employing the more contemporary 'thin film' technology. The latter are not necessarily better - indeed globally, only 10 per cent of installed solar power capacity uses thin film. But the local sourcing restriction does not extend to thin films and almost all Indian solar power producers have plumped for it.

... Still, desperate situations often spark off ingenious s…

Deal Alert: Avendus Capital advises BookMyShow on Accel Partner’s USD 18 Mn investment

Bigtree Entertainment Pvt. Ltd., the holding company of India’s leading entertainment ticketing website BookMyShow.com, announced an investment by Accel Partners, one of the leading global investors in Internet businesses. As a part of this transaction, Accel will invest USD 18 Mn through a primary infusion of capital and secondary sale of shares from existing investors.
Avendus Capital was the sole financial advisor for this transaction.
On signing the deal, Mr. Ashish Hemrajani, Founder & CEO of BookMyShow said, “The funding from Accel comes at an interesting inflection point in our journey and is a strong vindication of our efforts to create India’s leading online entertainment ticketing platform. We look forward to leveraging Accel’s global Internet experience and Network18’s continued support to expand our footprint and help take our customer experience to the next level.” 
Commenting on the transaction, Mr. Aashish Bhinde, Executive Director (Digital Media & Technology) …

Deal Alert: AbsolutData Raises $20M from Fidelity Growth Partners India

From the Press Release:
Fidelity Growth Partners India commits to a $20 million investment in AbsolutData, a leading provider of data analytics services to global organizations. With this round of investment, AbsolutData aims to scale up its global delivery footprint to meet the growing demand for advanced and big data analytics. 
AbsolutData is a pioneer in delivering analytics and research services through a global delivery model. The company today works with several marquee clients, including Fortune 1000 organizations across the globe, enhancing their advanced and big data analytics capabilities, and helping them gain real time insights to increase profitability and growth. Analytics is a top priority for CXOs across the world. However, there is a shortage of skilled data scientists to analyze the growing amounts of data. AbsolutData, with its deep industry expertise and strong analytical capabilities is well positioned to help its clients gain maximum value from their data assets…

Deal Alert: Avendus Capital advises MAS Financial Services Ltd on raising growth capital from DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH

From the Press Release:

MAS Financial, a leading retail non-banking financial company (NBFC) in Gujarat, has raised growth capital from DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH. With over two decades of experience in doorstep financing, MAS caters to the specialised financial needs of MSME’s. It also provides loans for financing two wheelers, CVs and affordable housing. 
Commenting on the transaction Mr. Mukesh Gandhi, Promoter and Director Finance MAS Financial said, “Our in depth understanding of the local needs and repayment capabilities along with a robust network spread across six states, has helped us grow a sound portfolio. We are happy that DEG was able to see immense value in our business model and will work with us towards creating a national footprint.” 
Mr. Kaushal Aggarwal, Managing Director at Avendus Capital said, “NBFCs focusing on retail-MSME lending are one of the fastest growing sectors in the Indian financial services industry. MAS Financial is …

Deal Alert: Accel Partners invests 2.7 crores in Mind Edutainment

From the Press Release:
Accel Partners, a leading global venture capital firm and a group of angels led by Meena Ganesh (CEO & MD Pearson Education Services India) has announced its investment of INR 2.7 crores in a Delhi based education company Mind Edutainment Pvt. Ltd. (MEPL).
Mind Edutainment was created in the year 2007 with a focus to serve in the field of child development through cognitive thinking process. Sangeeta A. Khurana & Ashutosh Khurana pioneered the concept of HOTS (Higher Order Thinking Skills) development program in India with the use of physical Thinking Tools and Mind Games. The program created by them has been adopted by 40 plus schools and 50000 plus students of UKG to Grade VIII as a complete subject on thinking skills development. 
They have created India’s first of its kind ‘THOTS Lab’, a scientifically designed space in the school, with a purpose to equip the future generations with the wisdom of structured “Thinking Skills and Thinking Processes”. 

Geothermal Cooling Startup GIBSS

Business Today has a profile of Mumbai-based start-up Green India Building Systems and Services (GIBSS) which uses geothermal technology to slash the power requirements of air conditioners.
In a conventional system, the cooling tower of an air conditioning plant sucks out the heat from an enclosed space, and ejects it into the environment. The technology GIBSS has designed uses instead a heat exchanger system to deflect the heat into the earth's crust. As the temperature just a few metres below the earth's surface is much lower than that of the air above, the energy transfer is more efficient, reducing power consumption.

...Equally challenging has been convincing customers. "Most companies didn't know what we were talking about," says Shenoy. The companies were also taken aback by the installation costs, which range from a few lakh rupees to a few crores, depending on the size of the establishment. "High upfront costs are the biggest roadblock," says Kum…

ReGen rides the wind

Business Today has an article on the Wind Energy sector with a special focus on the rise of ReGen Powertech (which is backed by PE investor Everstone and the Nuziveedu Seeds Group).
The Chennai-headquartered company's first project was a 50 MW wind farm in Karnataka's Chitradurga district, which was commissioned in September 2009. Since then, it has not looked back. In 2008/09, its first year of commercial operations, ReGen had modest revenues of about Rs 160 crore. That shot up to Rs 1,232 crore in 2010/11 and is projected to have crossed Rs 2,500 crore in 2011/12. "I've known the sector since I was 22," says the 48-year-old Khemka. His company's performance underlines just how well. In the last three years, Khemka has increased the firm's installation performance six times, revenues five times and profits 11 times. "Our order books are almost closed for this year," he says.

According to Indian Wind Turbine Manufacturers Association data for 2011…

Deal Alert:UrbanLadder raises funding from IndoUsVenture Partners

From the Press Release:
Recently launched UrbanLadder.com, led by Ashish Goel, (ex –McKinsey, ex-COO of ACK Media); and Rajiv Srivatsa (ex-Yahoo) announced today that the company has raised $1 Million in funding. IndoUS Venture Partners has led the round from its recent fund.
The vision behind UrbanLadder.com is to provide Great Furniture, and Make it Easier for its customers. UrbanLadder.com offers a unique experience of buying furniture from a wide range of beautiful designs that are durable and dependable. Purchasing is made easy through easy payment options, door delivery and after-sales support. 
“The Indian consumer struggles to buy good quality, well-designed and well manufactured furniture at reasonable prices. We aim to deliver delight to the Indian consumer by setting global benchmarks for distinctive and deep product range, a memorable shopping experience online and forthright business practices”, said Ashish Goel. The company will use the funds to strengthen the team, build t…

Small retailers enjoying VC-funded e-tail discounting

Businessworld has an amusing article on how small retailers are having a great time enjoying the (VC-funded) discounts offered by e-tailers.
Heavy discounts, offers on first-time registration, and cash-back vouchers floating on the web are pulling retailers, like Joshi, to shop online with the motive to resell. E-tailers, already marred by negative gross margins, are taking a further hit. Retailers buying online eat into e-tailers' margins and, despite offering huge discounts, these e-sellers do not get the loyal customer they have been looking to cater to.

...Electronics, with its thin margins, is the most adversely affected segment — though the fashion and apparel category, which has better margins, is not far behind. Industry sources believe that most e-tailers that sell a lot of electronics generate about 20-40 per cent of their sales from resellers. However, most electronics players claim it is less than 5 per cent. With companies such as Jabong, 99labels, Freecultr, Timtara, …

Jain Irrigation's stumble and recovery

Bhavarlal H. Jain, Founder-Chairman of publicly listed Jain Irrigation provide an interesting first person account in Business Today.

Between 1992 and 1994 we acquired an IT company, took a granite quarry on lease, ventured into merchant banking and even bought an advertising agency. These diversifications happened along with forward/backward integration projects for our existing operations. By March 1997, we were trying to manage 11 different projects involving an investment of Rs 400 crore - almost equal to the company's size then. About Rs 250 crore was raised by way of debt.

...In early 2001, Aqua International Partners, a water-specific boutique fund, offered to invest in the company. There was a catch: we had to give the fund a controlling stake. We grappled with the unenviable question: who should survive, the promoter or the company? We decided to cede control, and in August 2002, the fund invested Rs 183 crore and took a 49.4 per cent stake in the company. The promoters'…