VCCircle

It's very satisfying since the blog is just three weeks old. I was taken aback when I saw a mail from Blogstreet India team informing me that they have featured VC Circle as the Blog of The Day.

It's a good thing since they do not select Blog Of The Day every day. The last one was in June. Click here to see the list.

Andhra Pradesh is believed to be the centre of VC funding now. Hyderabad-based Hellosoft, a product solutions company focused on voice over Internet protocol, has raised $27 million from VCs worldwide. The VCs include TD Capital Ventures, Mitsui & Company Venture Partners, Entrepia Ventures, Venrock Associates, Sofinnova Ventures, Jump Startup, Acer Technology Ventures and Walden International.

Another company, Nimaya, also has almost the same story to tell. It has tied up with US-based Updata Partners and will get funding to expand its operations. "We have an innovative solution based on grid computing for integrated customer management. We are not a pure ERP provider nor are we into CRM solutions."

Another company is the Sentini group of Industries, which has chalked out a Rs 300 crore expansion project including setting up a potable alcohol manufacturing plant. It is also depending on money from some lesser known VCs in the US. (Via newindexpress)

Multiplex operator PVR Ltd. has set a price band of Rs 200 to Rs 240 a share for its initial public offer, which aims to raise up to Rs 185 crore ($40.4 million), a Reuters report said.

The company's 7.7-million-share, or 34 percent of the post-issue capital, offer is expected to open December 8-14. The IPO consists of 5.7 million new shares and sale of 2 million shares by private equity firm ICICI Venture, which would hold 27 percent of the expanded capital. ICICI Venture invested Rs 38 crore in 2003, and now owns 47 percent of the company after a series of private share issues.(Via Reuters)

VC Circle adds: ICICI Venture will garner anywhere between Rs 40 crore and Rs 48 crore for its partial exit depending on pricing of the share finally. The valuation of PVR at the peak IPO price is Rs 544 crore. Post-IPO, ICICI Venture will hold 27 per cent of the company, which means its holding will be worth Rs 146 crore. Add Rs 48 crore to it, then the total return - at conservative esitmates, since the share price can go up (or go down) after listing - of ICICI Venture is Rs Rs 195 crore. That's on an investment of Rs 38 crore. Over all, ICICI Venture is making 5 times their money in PVR in just two years. Way to go, Renuka Ramnath!

Indian wine industry is booming. Which is why private equity players have been looking at this space keenly now.

India’s wine market is estimated at five million bottles a year – equivalent to around 200 people sharing one bottle – and, at 2.75 billion rupees makes up less than 1 per cent of India’s US$1.8 billion alcoholic drinks market. But the wine market is growing at 25 per cent to 30 per cent a year, nearly three times as fast as beer, whisky or rum, which together make up 45 per cent of the total. Exports currently make up about 10 per cent to 15 per cent of total output.

Apparently, about 20 wineries have sprung up around Nashik and Pune only. (Via Reuters)

Related:

Private Equity Companies Drawing To Indian Wine Industry

Grover Vineyards Looking To Raise $3.3 Million From Private Equity Firms

After Sula Vineyards, GEM India Picks Up 26% In Mark Pi Chain

When every airline is looking at private equity to fund their expansion plans, this one is not. Vija Mallya's Kingfisher Airlines, which placed orders for 30 Airbus A320 aircraft worth $1.9 billion at the ongoing Dubai Air Show, said it would look at public market to finance the deal.

"So far a mix of equity and debt has met all our deposit and pre-delivery payments for the aircraft orders. Going forward, we would have to take the company public," its chairman and managing director Vijay Mallya said in Dubai. (Via Rediff)

Related:

Private Equity Firms Eying Stake In Coimbatore-based Low Cost Carrier Paramount Airways

Temasek Withdraws Its Investment Plan In Indian Low Cost Carrier SpiceJet

Air Deccan IPO Bird-hit; May Look For Private Equity

Private Equity Funds Eyeing Stake In Air Sahara

Reliance Infocomm is said to be under pressure to place shares privately to aid its expansion as an IPO is in the offing sometime next year, reports Business Standard.

“Infocomm should do this (private placement) as soon as possible,” said Kobita Desai, a senior telecoms analyst with Gartner Research. “They need the IPO to accelerate their expansion plans.”

Financial Times had earlier reported the company had secured commitments for its share placement from Citibank Private Equity, Carlyle, Deutsche Bank, CVC Ventures, Blackstone, and Temasek. (Via Business Standard)

Indian hotel industry is starved for funds to expand. Leading private equity players are looking at grabbing a share of this fast growing services industry. The Economic Times has reported that ICICI Venture Fund has bought 26 per cent in Hyderabad based Viceroy Hotels for about Rs 100 crore. India Advantage Fund of ICICI Venture has picked up the stake at Rs 87 a share. In another story, The Economic Times says:

It is reliably learnt that big funds from across the world such as Blackstone, ChrysCapital and Henderson seem to be eager to tap this space. Private equity funds are learnt to have raised more than $500m by June ’05 to invest in India compared with $260m in ’03. Major global funds are believed to be in talks with the Hyderabad-based Viceroy Hotels to pick up equity to gain a foothold in the rapidly expanding sector.

Silicon Valley venture capital fund Norwest Capital Partners (NVP) has picked up close to 25 per cent in Pune-based Persistent Systems for about $20 million, The Economic Times reports. Company officials confirmed that the deal with Pramod Haque-promoted NVP has been agreed upon, but a formal signing is a couple of weeks away. NVP has been scouting in India for investment for quite some time. Persistent is founded by Anant Deshpande and received an initial round of funding from Intel Capital. The company has grown rapidly in the past few years and is said to be contemplating a public issue in the near future. The promoters and founders among the management hold almost 75 per cent stake in Persistent Systems.

Persistent Systems recently announced acquisition of ControlNet India, a wholly-owned subsidiary of US-based ControlNet for Rs 9 crore ($2m). (Via The Economic Times)

It's now the Coimbatore-based low-cost carrier Paramount Airways' chance to be courted by private equity funds. UTI Ventures, the India Growth Fund (IGF) of the Kotak group and the New York-based Venrion, are looking for a stake in Paramount. Bennett, Coleman & Company Ltd (BCCL), the publisher of the Times of India and Economic Times, has also been looking for a small stake in the airline.

According to Business Standard, the airline, which is estimated to be valued at around $100 million, might dilute a 10 per stake to private equity funds. Paramount needs capital to finance its $525-million expansion plan. It has announced an expansion plan for the acquisition of 15 aircraft, including the Embraer 170, the Embraer 175 and the Embraer 195. Paramount Airways Managing Director M Thiagarajan declined to comment on this. But Kotak Mahindra Bank and BCCL executives confirmed separately that there had been talks for picking up small stakes in the airline, the paper reported. (Via Business Standard)

Related:

Temasek Withdraws Its Investment Plan In Indian Low Cost Carrier SpiceJet

Private Equity Funds Eyeing Stake In Air Sahara

Air Deccan IPO Bird-hit; May Look For Private Equity

It seems derisking pharma sector is the hottest thing going. The Export Import Bank of India (Exim Bank) has decided to launch a fund which will partner with pharma companies who are looking to launch generic drugs in the US.

"We have launched a scheme in which the drug companies can take our financial help to meet the cost of launching generic drugs in the overseas market, including the lucrative US and European market," Exim Bank Chairman and Managing Director T C Venkat Subramanian, told PTI.

Exim Bank is in talks with several pharma majors on this and hoped to clinch a few deals shortly. Under the scheme, Exim bank would form a SPV in which both the pharma company and the bank would have stakes. The SPV would bear the costs of getting the drug listed and FDA approval for launch. The bank will exit the SPV after after the drug is launched successfully and earn from capital appreciation in valuation for the holding in the SPV, Subramanian said. (Via The Hindu)

Related:

Dr Reddy's Started It; Now Torrent Too Looking For Private Equity Firms For Drug Development Partnership