The Venture Intelligence Blog

Sample this from Sanjay Chandra, MD of real estate firm Unitech, in a Business Today article on his lessons from the 2008-09 crisis. ...the media really worsened the situation. The worst was when news began doing the rounds that we had defaulted on our payments to the Greater Noida Authority, even though its CEO went on television to say that we had not defaulted. ...The frustration with lenders was also huge because they were the same people who would come to you analysing your balance sheet, analysing your assets and lend you money. They came back to you after just three months and wanted to recall their money because the market perception had changed. And these were relationships which we had for years. We had a sanction of Rs 700 crore from a large public sector bank. The loan was very heavily collateralised, they were happy with the structure, but one board member objected saying that "if this comes into the papers tomorrow we will be in trouble". So, the approved loan

...is Microfinance, points out Vijay Mahajan, founder of Basix tracing the evolution of the sector in an article for Business Today. With the exception of the mobile telecom, perhaps no other sector has grown as fast and as big in terms of customer base as the microfinance sector in India in the past two decades. Today, the MF sector lends Rs 1,000 crore (11 digits) every month! ...In the long run, MFIs will probably resolve into two segments— the developmental MFIs and commercial MFIs. Developmental MFIs will be more focussed on the poor and on social impact, and offer more broad-based financial services such as microinsurance and remittances. Many of them will go beyond financial services and take a livelihood approach. They will have to increase their reliance on funding sources sympathetic to these approaches— such as philanthropic foundations, social investors and governments. On the other hand, the commercial MFIs will focus on microcredit to those slightly above the poverty lin

ALMT Legal and Desai & Diwanji topped the Venture Intelligence League Tables as the Most Active Legal Advisors for Private Equity and M&A deals respectively in 2009. Ernst & Young topped the League Tables as the Most Active Transaction Advisor (PE and M&A combined) for the year. For PE deals, Ernst & Young was tied with boutique investment banks MAPE and o3 Capital for the first position (with 5 deals each). On the M&A front, E&Y, which topped with 7 deals, was followed by MAPE (6 deals) and Kotak and Avendus Capital (with 5 deals each). Among Legal Advisors for PE transactions, ALMT (with 21 transactions to its credit for the year), was followed by AZB & Partners (12) and Khaitan & Co. (10). In the League Table for Legal Advisors for M&A transactions, Desai & Diwanji (with 17 transactions), was followed by AZB & Partners and Khaitan & Co. (with 15 deals each). The Venture Intelligence League Tables, the first such initiative exclusiv

Forbes India has an article on how the plans of Ajay Singh-, BVR Subbu- and Ashish Deora-founded Argentum, which had acquired the bankrupt Daewoo Motor's plant in Haryana to produce auto components for MNC auto makers, have fallen apart and is now essentially a Real Estate play. ...as things stand, the partnership is in tatters and Subbu and Singh are negotiating an exit strategy for the former and both blame each other for not fulfilling their responsibilities. ...While all the three partners agree economic conditions derailed their plans, they blame each other for making things worse. For instance, Singh claims Subbu failed to deliver on the various deals he was supposed to bring in. He argues that Subbu’s strategy to wait for that one big deal to come Argentum’s way was not practical. And that he would much rather the company got off the ground with whatever orders that came. ...If Subbu exits, Singh and Deora may find it easier to pursue a few real estate deals. They know that

Subroto Bagchi has published an interview with Rajeev Mecheri, Co-founder of building security technology firm iMetrex, in Forbes India magazine. In time, they became the go-to organisation for every high-rise in town that required compliance with safety, security and energy management norms. In 2007, Siemens noticed their work. And Siemens also noticed that their building solution software was comparable and in some ways, actually ahead of what Siemens offered. It wanted to buy them out but with a condition: The brothers came with the business. Rajeev came on board as the managing director of Siemens’ Building Technology business for an agreed period of five years. This year, the business having fully integrated, Rajeev has decided to move on and brother Anand has stayed on as the chief marketing officer of the Building Technology business, located out of Switzerland. The acquisition is valued at a whopping $100 million. If you have not heard about it, it is because in Chennai, folks

Extracts from the interview with Subrata Mitra, Partner at Accel Partners India that appeared in the GIVCA-Venture Intelligence India Venture Capital Report-2009 (that provides a synopsis of VC investments during the year). Subrata earlier co-founded early stage-focused VC firm Erasmic Venture Fund, which merged with Silicon Valley VC firm Accel Partners in mid-2008. Accel is among the handful of funds in India that are truly early-stage focused and was an active investor in 2009, especially in the Internet/Online Services sector. Venture Intelligence: Has your team’s overall philosophy of investments changed since the merger of Erasmic with Accel? What are the other changes now that you are Accel India? Subrata Mitra: Clearly, we’re managing a bigger fund now than at Erasmic. That does mean our investment range has moved to at least 3-4 times for the better companies. It has changed our thinking somewhat in terms of types and stages of deals we would like to do. VI: What attracted y

Extracts from the interview with Sanjiv Singhal, Managing Director of BanyanTree Finance (the advisor to the BanyanTree Growth Capital fund) that appeared in the Venture Intelligence India Roundup-2009 report (that provides a synopsis of Private Equity investments during the year). BanyanTree is a $125 million Private Equity fund that provides capital to middle-market companies in India with promising growth prospects. It was among the most active investors in 2009. Venture Intelligence: What is BanyanTree's investment strategy? Sanjiv Singhal: We like to focus on the underserved spaces. The manufacturing sector gets a disproportionately small share of PE investments in India – especially when you consider that we are the seventh largest industrial economy in the world. For most people, doing a deal in manufacturing is time consuming and maybe not as glamorous as doing a telecom tower deal, etc. But this sector is our happy hunting ground. At a company level, we try to provide ca