The Venture Intelligence Blog

Gautam Chhabria has an interesting comment in reply to Menaka Doshi's post on whether Vendata's acquisition of Cairn India would work given that it does not fit Vendata's "core competence". My answer, what Mr. Agarwal is doing is perfectly right. If he were to have stuck to what consultants and management gurus, currently prescribe, i.e. core competence, then a scrap trader would have remained just at that i.e. scrap trading. He wouldn’t have taken the leap of faith to get into manufacturing cables, to have gotten into making jelly filled telephone cables given the huge demand from erstwhile DOT for laying landlines across the country in the 80’s. He wouldn’t have then leaped into fibre optics after betting that data transmission in the age of internet would explode. ...When the Indian government offered a once in a lifetime opportunity by privatizing national assets like BALCO and Hind Zinc at bargain basement prices, sticking to core competencies would have mea...

From the Business Today article Meet the brain behind Koenig: Rohit Aggarwal, Founder and CEO, who is on his way to becoming a successful first-mover in what is being broadly called education tourism in India. Koenig has a modest turnover of Rs 20 crore with more than 1,500 students attending its courses annually, but it is a fast-growing one— Aggarwal's business has trebled in the past three years. ...Under its business model resting on training and hospitality, Koenig works as a one-stop shop for flight bookings, local transport, stay, training, hospitality and even helps its students tour India. While India's IT training companies play host to students from all across the world, tourism and hospitality is seldom bundled with training."We are as big a travel company as we are a trainer," says Aggarwal, elaborating no more than that the tourism services part of his business is "substantial". ...There are, meanwhile, others who are gingerly testing the water...

Business Today has an article on the opportunity that is drawing entrepreneurs from across the spectrum. So, what has made these players, most with no background in the realty or construction business, tap a market that established players have avoided? "The idea of going into this segment was primarily driven by the humongous size of the market. It's a high-volume, low-margin business," says SAS's Batta. Consulting firm Monitor's calculations peg the market for Rs 3-10 lakh homes at a mind-boggling Rs 11 lakh crore with demand running into 21 million. Monitor also believes that corporates can potentially create billion-dollar businesses in the next five to seven years. ...The entrants are not in for a cake walk, though. For one, margins are low, which perhaps explains why most of the established realty players are staying away. SAS expects to squeeze a margin of 15 per cent from micro-housing, compared with 25 per cent from its other projects. Spice Homes, too, ...

In an article published in Economic Times, Mayank Singhal, argues that PE firms in India have to come up with creative strategies to deploy the huge amounts of "dry powder" (uninvested capital) and counter the challenges posed by high entry valuations. He suggests 3 such - "ancillary strategy", "sector-driven approach" and "flexi-structure investment style") . Consider the $30 billion in dry powder waiting to be deployed in India by global and local funds. Assuming an average equity cheque size of $25 million, this would imply 1,200 PE investments. Now compare this to the actual investment pace of close to 250 deals a year since 2004, considered by some to be the year when PE took off in India — it’ll take close to five years just to deploy currently committed capital, let alone huge incremental funding that is likely to pour into India from global LPs over the next 3-4 years. ...The ancillary strategy calls for a breakaway from the traditional ...

From the profile of the Hyderabad-based Ramky Group's waste management unit. For all his global ambitions, Rami Reddy, 45, knows his biggest strength is India, simply because REEL (Ramky Enviro Engineers Ltd) is a leading provider of integrated environmental and waste management infrastructure in a country whose industries and urban landscape generate huge amounts of waste with very few organised players to handle it. There is no inventory of waste streams or estimation of market size, government policies have developed in fits and starts, the enforcement mechanism is weak and awareness exists only in pockets of corporate India. Even so, REEL has big names like Sun Pharma, Mahindra & Mahindra and Alfa Laval as its clients, and handles everything from paint sludge, oil-soaked materials and expired chemicals to sludge from effluent treatment plants. Here's its scale: REEL operates 11 hazardous-waste management facilities in India, 16 hospital-waste management facilities, inc...

Catalyzed by new government policies favouring Solar Energy and multiple demand-driven opportunities for water-related companies, Private Equity & Venture Capital firms are focusing keenly on these Cleantech sectors, reveals a new report from research firm Venture Intelligence. Private Equity and Venture Capital surveyed recently by Venture Intelligence, a leading research firm focused on Private Equity and M&A deal activity, selected chose Water & Wastewater Engineering, Energy Efficiency, Waste Management & Recycling, Energy Infrastructure, Pollution Control and Cleantech in Manufacturing/Industrial Environments as among their favourite sectors within the industry. The survey results are published in the in the newly released report from Venture Intelligence titled “Private Equity Pulse on Cleantech”. In addition, expert articles by both PE/VC investors and advisory firms in the report, point to rising investor interest in solar energy. Citing how the accelerated dep...

Economic Times has an article on how mainstream VCs are now increasingly investing in "bottom of the pyramid" opportunities. Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in