The Venture Intelligence Blog

Knowledge@Wharton has an article based on a panel discussion on destinations for global real estate investors. According to the panel, emerging real estate markets in India and China along with recovering property industries in Germany and Japan, are the most attractive. (Wharton real estate professor Peter Linneman) described panelist Surendra Hiranandani, managing director and founder of the Hiranandani Group in Mumbai, as extremely popular these days with the hordes of real estate investors trekking to India to investigate its hot property market. "There's an image that, in India, the streets are paved with gold. What's the reality?" Linneman asked. According to Hiranandani, the Indian economy only began to open up in 1991 compared to China, where free-market reforms began to take hold in 1979. The effects of those changes are just now beginning to become evident in India. He also noted that the capital coming into India is generating greater transparency in busin...

Businessworld has a cover story on the new drug discovery partnerships being created between Indian life sciences firms and MNCs. Last week, Nicholas Piramal signed an agreement with the UK drug discovery firm Morvus Technology. Nicholas Piramal will use the technology of Morvus to develop drugs in areas such as cancer, diabetes and arthritis. We could shrug it off as a routine development, but for two reasons. One, it is the third R&D collaboration agreement that Nicholas Piramal has signed with an overseas company in the last year and a half. Two, it is the sixth R&D collaboration between an Indian and a foreign company within the last three months. Several more are being negotiated and will be signed within a few months, say sources. Have the Indian pharma and biotech companies found a new strategy for drug discovery and development? ...Last year, Nicholas Piramal made a strategic investment in the Canadian firm Biosyntech, a company that makes gels for regenerative medicin...

Based on his impressions upon attending TiECon Delhi, Basab Pradhan feels India needs a unique model for the venture business. "VCs and entrepreneurs, who take a cookie-cutter approach to it, are in for a rude shock," he says. - Unlike in the Valley, Web 2.0 has no relevance to the Indian domestic market. Internet penetration is low (5.4%), broadband is lower ( - Mobile however is hugely interesting. Mobile penetration in India is twice that of the internet and is growing at rates close to 50%. There are opportunities to develop mobile applications that the developed world never needed because of high internet penetration. Booking a cinema ticket in the US is probably done 95% of the times over an internet connection and 5% on a cell phone screen. In India it may be totally different. This also holds out the opportunity that Indian startups may develop mobile applications for the Indian market and then take them to Europe and other developed markets. Arun Natarajan is the Fo...

Guest post by Deepak Srinath : Mobile payments or m-payment are not new buzz in India; attempts at creating m-payment solutions go as far back as 1999 and has even seen some VC investment in the space. However, the market was clearly not ready for it and m-payment was more a conceptual experiment than any real paradigm shifting opportunity. The second coming of mobile payments in recent months is an entirely different story. It has the backing of a 135 million user base that is growing at 5% a month, and a retail economy that is poised to take off into stratosphere. m-payment is a broad term for any mechanism that allows a user to make a payment for a service or goods, or transfer money to another person using a mobile phone. The m-payment solution typically works in conjunction with an existing bank account or credit card the user holds. The basic hygiene factors for an effective m-payment solution are: - Ease of use - Maximum device support to cover a large user base - Support for a ...

Businessworld has a detailed cover story - here , here and here - on the Special Economic Zone (SEZ) business including the challenges of making money on these ventures. SEZ builders must have the capacity to inject the capital early and wait for returns — it takes a minimum of eight years to take the project into the payback stage. This is where the serious players will score over the speculators. Their returns will be far higher than those who parcelled out the land earlier. “IRRs of 35 per cent are not unheard of. The average IRR could be 20-25 per cent,” says Magazine. After this, the final annuity phase becomes easy. Here, the SEZ generates a steady stream of income and needs minimum management. Utilities and facilities management are, perhaps, the only requirements. ...Unfortunately, many SEZ builders see this more as a grand realty development opportunity than as an infrastructure business — buy, build, sell. That model may bring profits in the short to medium term, but is unl...

Businessworld has an article on Reliance Fresh, the Anil Ambani group's venture into the neighbourhood convenience store business. Eleven stores were up and running by the end of last week and 100 more will spring up before the end of the year. The plan is to have 3,000 Reliance Fresh outlets soon. (Several other formats in categories including apparel, electronics, etc., will follow soon.) Sources say that Reliance believes each Reliance Fresh outlet could earn annual revenues of Rs 3 crore. That’s a sale per sq. ft of roughly Rs 12,500. Industry sources say this is in line with what other chains have achieved in the past. For instance, at its peak FoodWorld had managed a Rs 300-crore turnover on its 80 stores. The average size of a store was about 3,000 sq. ft — or sales of Rs 12,500 per sq. ft. If Reliance Fresh can match that, the 3,000-outlet chain could be in line to clock revenues of about Rs 9,000 crore. Arun Natarajan is the Founder of Venture Intelligence, which tracks p...

Businessworld provides some interesting numbers about the market for children's garments as part of an article on suiting specialist Raymond's entry into this segment. The kids apparel market in India is worth about Rs 27,000 crore of which only about Rs 500 crore goes to the organised sector, growing at an average of 20 per cent against the 30-35 per cent for the overall industry. So far, the organised market was dominated by Lakhani-owned Gini & Jony Apparels with a 30 per cent market share, followed by Weekender Kids and Ruff Kids. Clearly, there is space for more organised players to come in and take a larger bite of the market. That is what Raymond plans to do. With prices ranging from Rs 299-999 against Rs 295-2,000 for Gini & Jony. ZAPP! is clearly aiming for volumes. Whether it can deliver on the target depends on what Raymond brings to the consumer at a lower price. It is doing the usual things. For example, it has tied up with Warner Brothers for the ‘Superma...