The Venture Intelligence Blog

Businessworld has a cover story on how and why global telecom equipment firms are beginning to manufacture in India. One of the driving factors behind this growing interest is, without a doubt, India's emergence as the fastest growing telecom market in the world (in absolute numbers, China still takes the cake). India got that distinction in early 2004 when its telecom market growth touched 67.73 per cent compared to 26.75 per cent for China, which it relegated to second place. Equally significant has been the role played by Dayanidhi Maran, the Union minister for communications and information technology. Over the past 12 months, he has been hotfooting around the globe, and positioning India as a telecom manufacturing destination amongst investors. Arun Natarajan is the Founder of Venture Intelligence India, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of Venture Intelligence India newsletters and reports.

The tally of companies in which Bennett, Coleman & Co. (BCCL), the publishers of Times of India and Economic Times, has acquired stakes has crossed 40, according to a Businessworld article. In fact, it has become one of the biggest portfolio investors with Rs 700 crore already deployed in a clutch of companies that will earn it a neat packet when they go for their IPOs. And it's still buying. The article goes on to explain how BCCL's "private treaties" work: In the portfolio investments, BCCL seems to be picking high-growth SMEs headed for IPOs. They need media space to build their brand and corporate image. BCCL, says Rajshekhar, is "helping emerging companies realise the power of advertising". He heads a division called 'private treaties'. The typical deal is a cash payment for a small equity stake, say, 5-10 per cent. The deal size varies from Rs 9 crore-100 crore. So far, BCCL is dipping into its considerable cash reserves of Rs 2,379 crore ...

On Monday (Dec 19), I attended the soft launch of Mentor Partners, a unique technology-focused seed fund, in Bangalore. The firm plans to initially invest $1 million each in 10 product-focused companies in the IT and telecom space: around $500,000 as seed investment or "bridge loan" and the remaining as part of the first round investment along with other Venture Capital firms. With two partners on the ground in Bangalore (Ravi Narayan who earlier co-founded Nextone Communications in the US and V.Prabhakar, a co-founder of Bangalore-based software testing services firm RelQ), Mentor Partners will help its investee companies get access to top companies in India, the US and other markets via its about 35 other members in its network. The network includes those who are either operating managers (like Vish Narayanan, Head of Telecom Operations at General Motors in Chicago) or "been there, done that" entrepreneurs (like Rosen Sharma who has founded several start-ups like ...

Why is it that despite several months of trying, large buyout funds have not been able to close any significant deals in India? The answer seems to be the lack of a strong “theme’ favoring deals in this segment, plus the inability to include leverage (debt) as part of buyout deals. Industry experts believe that privatization-of both Central and regional government companies-in China will be a predominant theme that is set to accelerate buyout activity in that country. In India however, beyond the now-on-now-off privatization attempts as well some shedding of non-core businesses by old business houses, there is no dominant theme that favors buyout activity. "Partnering Indian companies wanting to acquire overseas is the only theme we see in India. Everything else is just opportunistic," said Anurag Mathur, Principal of CCMP Capital Asia (formerly JP Morgan Partners Asia), at a panel discussion on buyouts at the recent Asian Venture Capital Journal (AVCJ) forum in Mumbai. CCMP ...

Knowledge@Wharton has an article on how India's public companies must meet a January 1, 2006, deadline to comply with sweeping new corporate governance standards. Extracts: The reforms, ordained by the Securities and Exchange Board of India (SEBI), are laid out in amendments to Clause 49 of the companies' listing agreement with Indian stock exchanges, a section that pertains to corporate governance. ...Infosys pays its directors one of the highest annual retainers in India -- nearly $45,000 a year. In return, it demands a lot of its directors, including requiring them to participate in a peer review and an annual self-assessment of their contributions to the company. ...Harbir Singh says that one key area in which Indian companies generally lag the best international standards is in "the amount of disclosure of strategies and priorities" to shareholders. He attributes that to a corporate culture in which Indian chief executives have greater longevity and therefore wi...