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Venture investments defy gravity

If dismal quarterly results and hammered stocks are painting a bleak picture of the tech sector, here is the proverbial silver lining. Venture capitalists (VCs) are surprisingly upbeat. Last week alone, five companies in India have raised funds from VCs like Intel Capital, SAP Ventures, Canaan Partners, Helion Venture Partners and SVB India Capital Partners (venture fund affiliate of Silicon Valley Bank). “There is a lot of money chasing good technology stories,” according to the promoters of companies like iYogi and United Lex who have just raised money. While iYogi raised $9.5 million in Series B financing from SAP Ventures, Canaan Partners and SVB India Capital Partners; United Lex raised $6 million. And so far data bears that out. In an otherwise tough economic environment, VC investments in the first half of 2008 are broadly at par with the numbers last year. In the six months to June, VC firms invested $340 million in 51 deals compared with $363 million in 55 deals in the same period last year, according to VC tracking firm, Venture Intelligence. Other investors, however, have not been able to weather the slowdown. Private equity (PE) deals, for one, have shrunk to almost half in the first half of 2008. The total value of deals announced in the first half of 2008 was $760.17 million against $1.47 billion during the first half of 2007 respectively. […]

PE funds focus on realty, infra

Sectors with cheap valuations are on the radar of most private equity funds, most of whom are flush with funds. Owing to the market slowdown in the first half of the year, most PE funds did not deploy cash. Deals clinched in the last few weeks indicate that PE funds are targeting real estate, education and infrastructure companies. Recently, Bahrain’s TAIB Bank acquired a 26 per cent stake in Anant Raj Industries. Lightspeed Ventures and Sequoia Capital invested $18 million (Rs 76.3 crore) in, followed by JP Morgan, which has picked up a 33 per cent stake in Alok Infrastructure’s Special Purpose Vehicle. “Real estate, as a sector, has corrected a lot and probably we could see some more correction but there is no dearth of demand. Price has now become attractive for some of the good companies in the sector. One will see lots of deals going forward,” said the country head of an international PE fund. The Bombay Stock Exchange’s Realty Index has crashed more than 60 per cent this year from its peak of 13,848 as on January 8, 2008. Promoters too, as the PE funds say, are coming to terms with the reality. The lag effect is showing and the PE funds have realised that they cannot make aggressive projections way ahead of fundamentals. […]

Grainger buys stake in Indian distributor

Maintenance products distributor W.W. Grainger Inc. said Wednesday it has paid $5.4 million for a stake in an Indian industrial and electrical wholesale distributor. Along with the $5.4 million purchase price for 49.9 percent of Asia Pacific Brands India Ltd., Grainger put in a $1.1 million matching investment to help expand the business. Asia Pacific had revenue of $47 million in its last fiscal year ended March 31. It has 27 locations across India.(CNN Money) […]

Financial Technologies buys Apian Finance & Investment

Financial Technologies India (FTIL) has acquired Apian Finance & Investment, a RBI Registered `NBFC` at a cost of Rs 15 million. FTIL has a technology development center in Mumbai providing transaction automation technologies for equities, derivatives, forex and commodity markets. FTIL also offers market infrastructure based shared services involving sophisticated exchange operations and technology infrastructure as a neutral service provider.(My Iris) […]

Sintex Industries acquires 90% stake in Geiger Technik Germany

Sintex Industries, a market leader in the plastic and textiles segment, today announced that through its wholly owned subsidiary Sintex Holdings B.V., Netherlands, the company acquired 90% stake in company holding assets of Geiger Technik GmbH (Garmisch-Partenkirchen, Germany) for Euro 35 million. Geiger family will continue to hold 10%. This acquisition will assist the company to further enhance its presence in the European Market. Commenting on the acquisition Amit Patel managing director, Sintex Industries, said, “This acquisition offers Sintex a strategic market entrance in Germany which is the capital of the European automotive market. GEIGER makes state of the art unique innovative products which are well positioned in a market where fuel consumption reduction becomes the USP of OEMs. “ “We do welcome the comprehensive commitment of Sintex very much. With their investment, GEIGER will continue to thrive as an innovation leader in the automotive components market and identify additional fields of business. The growing Indian economy and the emerging global footprint of Sintex can be leveraged for propelling GEIGER on accelerated growth plan,“ added Albert Geiger, the managing owner of Geiger Technik GmbH, Germany. […]

Red Fort Capital to seal 6 realty projects of Rs 4,000 cr soon

Red Fort Capital, a private equity fund focused on real estate development, is in advance stages of negotiations with six developers for an equal number of projects worth Rs 4,000 crore in the metros across India. The PE fund today joined hands with Godrej Properties to develop an IT park in Kolkata, where Red Fort Capital has picked up 49 per cent stake. The project, Godrej Genesis, is expected to generate sales of over Rs 750 crore. “We are in the process of closing a number of transactions in the NCR, Mumbai and Bangalore. We are currently talking to six different developers in these cities,” Red Fort Capital Director Kuldip Chawlla told PTI. Without divulging names of the possible builders, he said three of them are 'big national developers', while the rest are local players. […]

Gitanjali Gems unit buys jewellery retailer

Jewellery maker Gitanjali Gems Ltd said its unit, Gitanjali Lifestyle Ltd, has acquired B Vijay Retail Ventures Pvt Ltd. Financial details of the deal were not disclosed. B Vijay, which owns the 'HooP' brand, retails gold, silver and other precious metals and diamond jewellery. (Reuters) […]

Moser Baer unit to raise $50 mln

Moser Baer Entertainment Ltd may raise up to $50 million in equity and debt to fund its expansion plans, the Economic Times reported on Wednesday, quoting industry sources. Moser Baer Entertainment is a unit of optical media maker Moser Baer India Ltd . Moser Baer officials could not be reached for comments. Moser Baer Entertainment is in talks with private equity firms including ChrysCapital and Warburg Pincus, the paper said. Moser Baer acquired entire shareholding of Moser Baer Entertainment from its wholly owned subsidiary Moser Baer SEZ Developer in February. (Reuters) […]

Former India head of CVCI to launch India PE Fund

Ajay Relan, for long the managing director and India head of Citi Venture Capital International (CVCI), the private equity business spun off from Citigroup Inc., has been bitten by the “entrepreneurial bug”. In his first media interview to Mint after stepping down from CVCI last fortnight, Relan discusses the new fund — of between $500-$750 million — that he is going to start, and why he is happy that it comes at a time when stocks at the Bombay Stock Exchange are not at near-25,000 levels. […]

PE-controlled firms beginning to look at India

Indian outsourcing firms are winning deals from overseas entities controlled by private equity (PE) firms that are growing more comfortable with farming out work both as a way to reduce costs and leverage on the technology talent in Asia’s third largest economy. PE-controlled firms are typically privately held and lack the size and scale to outsource technology and back-office services. But as global economic growth slows and cost-cutting becomes imperative, PE and venture capital firms are cutting deals with outsourcing firms that can apply across their portfolio companies. “These are organizations which traditionally haven’t looked at globalizing their businesses, but are trying to do it now,” says Rohit Kochar, who advises PE firms on outsourcing possibilities. “These organizations have been languishing, and they are beginning to look at how to leverage India.” […]