November 2007
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PEs take fancy to pharma cos with outsourcing deals

Small and mid-size pharma companies focused on outsourcing seem to have caught the attention of investors, if the recent investments by private equity (PE) players in the sector are any indication. PE firms such as ICICI Venture, Citi Venture Group and Sequoia Capital have put their money in upcoming pharma units that are focussed on outsourcing. Sequoia Capital on Wednesday invested Rs 100 crore in Hyderabad-based pharma and biotech research firm GVK Biosciences. Earlier, the PE firm had also picked up around 18% stake in clinical research firm Sai Advantium for around Rs 50 crore. Two other clinical research firms Radiant Research and SIRO Clinpharm have also received PE fund infusement from ICICI, 3i and Kotak, respectively, earlier this year. Says Sequoia Capital MD Sandeep Singhal: “The growth in small companies and companies which are focussed on a specialisation, is much faster than the leading established players. We are looking at investing in companies which are looking to become leading players in the future rather than the stable companies with lesser risks and lesser rewards.” Adds PwC associate director Pharmaceutical and Life Sciences Practice Sujay Shetty: “This is a new breed of companies which has entered the new space of high potential contract manufacturing and outsourcing. Outsourcing is the biggest growth area in the pharma sector and the PE investments in such firms will continue.” [...]

Nexus India Launches US$100 Mil. Fund

Nexus India Capital has closed a US$100 mil. venture cap fund to invest in a number of sectors including media, communications and technology. The fund and its portfolio companies will be advised by entrepreneurs and investors in the technology, media, outsourced services, retail and consumer sectors. The founders of the fund and its advisory companies include Naren Gupta, Sandeep Singhal, Suvir Sujan and Intel senior executive Bill Davidow. Baazee.com co-founder Sujan said, “Smart entrepreneurs realize that they need more than just money. We are successful entrepreneurs who have founded, built and exited companies successfully in the technology, services and consumer arenas. Our entire team of advisors in India and Silicon Valley is accessible to all the entrepreneurs we back for support on strategy, operations, organizational building, sales amongst others.” [...]

Shell to buy BPCL's stake in Bharat Shell for Rs 152.4 cr

Global oil major Royal Dutch Shell will buy Bharat Petroleum Corp Ltd's (BPCL) 49 per cent stake in lubricant marketing firm Bharat Shell Ltd (BSL) for Rs 152.40 crore. BPCL is exiting the joint venture company, floated in 1993 to market Shell branded lubricants in India, as it has developed a competing product. “The Cabinet (at its meeting yesterday evening) gave its approval for the sale of 49 per cent equity stake of BPCL in BSL to Shell or its affiliate for a consideration of Rs 152.40 crore in cash,” Information and Broadcasting Minister P R Dasmunsi said on Friday. Shell currently holds 51 per cent stake in BSL. BSL incurred losses till financial year 2001-02 but after hiving off its loss-making LPG business, the company showed signs of turnaround and posted a net profit of Rs 12.12 crore in 2006-07. [...]