VCCircle

Probably for lack of interesting startups in the country, VC funds are these days conceiving business plans themselves and looking for managers to run the ventures. IDG Ventures India is seeking a top-end software executive as CEO for a startup it has conceived and funded in the managed security services space. Sudhir Sethi, Managing Partner of IDG Ventures India, has put out a post on his LinkedIn account for the same. Techgigger has more details.

Hat tip to VC Circle reader Pukhraj Singh. He writes in: "It's a services-based company. This could be really interesting as only a few big outsourcing players had ventured into managed security services space, but due to the confidentiality and legal issues surrounding this industry, things didn't work out well. Outsourcing security has been under a constant debate and is considered to be lagging behind the mainstream security market by 3-4 years. Would be interesting to see how they work all this out and cap on the opportunity."

By the way, the job details are here:

--Build leadership position in a global service niche play for managed security services

--Achieve revenue of $100 million in 6 years with a PAT of 20%

--Build ecosystem for innovators, application developers, and developer community and solution providers

--CEO will report to board

--Interact extensively with the board in ascertaining and in many ways evolving the business plans

--An engineer-MBA from a reputed institute would be the education background

--Attractive compensation plus significant options

--Location: Bangalore

--Targeted joining date is Oct 2007

Apply here.

Mphasis founder Jerry Rao is backing a legal process outsourcing company in which his son is also reportedly part of. Rao has made an angel investment in Bangalore-based JuriMatrix, an LPO, reports Business Standard.

The company is apparently in the process of raising $12 million in venture capital. It's founded by Sajan Poovayya, the Founder and Managing Partner of Poovayya and Co., a full service law firm based in Bangalore. He is no stranger to the legal circles in India, as he advises tech biggies in Bangalore. Vijay Rao, a graduate from graduate of Dartmouth College in the US, is Director, Marketing.

With Jerry Rao backing the venture and playing the role of non-executive chairman, and with names like Rajat Gupta, former global CEO of McKinsey, and Hema Ravichandar, former HR head of Infosys, acting as advisors, it's only a question of time when JuriMatrix landed funding.

This just in. Nexus India Capital, the $100-million venture capital fund, has invested over Rs 10 crore or $2.5 million in digital map data company CE Info Systems. It runs MapMyIndia.com, an interactive online map service.

This is the second institutional investment for CE Infosystems, a company set up by entrepreneur couple Rakesh and Rashmi Verma in 1992. In April 2007, it had received an undisclosed investment from Sherpalo, the VC fund of Ram Shriram, and Kleiner Perkins.

Delhi-based CE Infosystems provides services and solutions based on geographic information systems and location-based business intelligence. It claims to be the single largest repository of digital spatial data of India. A press release said that the company released the first version of nationwide GPS-based road network navigable maps in early 2007, which can be used on multiple media including the internet, car navigation, mobile navigation and several other location-based and GIS applications targeting the needs of consumers and enterprises.

The company has also partnered with Yahoo India, Wayfinder, and Airtel to offer mapping services to the internet and mobile users in the country. Suvir Sujan, Managing Director, Nexus India Capital, has joined the board of the company.

Nexus' current portfolio includes mobile VAS company Mobile2win, open source web collaboration software company Dim Dim, and voice SMS provider Kirusa.

Earlier, in February 2007, Bennett, Coleman & Company had invested in Hyderabad-based SatNav Technologies, a company in the similar space. This company was founded by a group of ex-Satyamites led by Amit Prasad, who is the founder MD & CEO.

Related:

Kleiner, Sherpalo Invest In GIS Company CE Infosystems

A deal is not concluded yet in broking firm UTI Securities. It was reported earlier that Standard Chartered Bank had almost closed a deal to buy a stake in UTI Securities, currently owned by Securities Trading Corporation of India. The firm is still up for grabs if anyone is interested and willing to give the price - probably higher than what Stanchart is offering. A Stanchart executive has been quoted by Press Trust of India (Via The Economic Times) as saying that they were still in "advanced stage" of talks with STCI to buy a stake in UTI Sec.

"We remain interested in it (UTI Securities) and continue to talk," Standard Chartered Bank India CEO Neeraj Swaroop told media. STCI had put 49 per cent stake in UTI Sec on the block. In fact several firms like Kuwait's Global Investment House, Citigroup, Macquarie Bank, and Societe Generale were reportedly in talks with STCI to buy a stake. In May, it was reported that Stanchart had almost done the deal. Several banks are looking for an entry into broking and financial products distribution, so a firm like UTI Sec offered synergy.

STCI bought UTI Sec in February 2006 for Rs 265 crore from the Specified Undertaking of UTI. STCI wants to sell 49 per cent of it now, and the rest after the lock-in period which will end in 2009.

Meanwhile, Stanchart said it's looking for partners for its proposed asset reconstruction company.

Related:

Standard Chartered Bank To Buy 49% In UTI Sec For Rs 140-150 Crore

Citi, Macquarie And Three Other Foreign Firms In Race For Stake In UTI Securities

On Tuesday, VC Circle had reported that Sequoia Capital India had most likely invested in former Yahoo India MD George Zacharias' new remote infrastructure management startup. Mint today reports that Sequoia would have committed about $20 million in Zacharias's yet-to-be-named IT company. The capital would be invested over the next 12 months, which includes the funding of an acquisition of a US company too, Mint reports quoting sources.

Sources told VC Circle that C.R. Srinivasan, former head of VSNL - Singapore, might be joining Zacharias in the new IT venture, besides a few ex-colleagues of his from Sify and Yahoo.

How did Sequoia zero in on Zacharias? Sources attribute it to the connection with ex-Sify CEO R Ramaraj, who is currently an adviser to Sequoia. Zacharias was hired as COO of Sify by Ramaraj. Some industry sources suggest that Ramaraj-Zacharias combination could even buy out the data center business of Sify. Only if Raju Vegesna-owned Sify is ready to sell. A two-third of revenues of Sify come from enterprise services like data centre and hosting. The idea, however, is not far-fetched.

It has been a remarkable journey for Ess Dee Aluminium, an aluminium foil-based packaging company for pharma businesses, from Rs 1 lakh turnover in 1991 to Rs 1,600 crore valuation in 2007. The company has just raised Rs 81 crore by diluting 5 per cent stake to Morgan Stanley. This was a company which analysts urged investors to avoid when it came up with an IPO in December last year.

Ess Dee Aluminium on Wednesday informed Bombay Stock Exchange that it would issue 1.41 million equity shares of Rs 10 face value on a preferential basis to Morgan Stanley at Rs 575 a share. That makes the deal worth Rs 81.07 crore or $18 million, valuing the company at $360 million. Interestingly, in March 2007, foreign fund Fidelity had picked up 5.21 per cent stake in the company for about Rs 40 crore, at just half of the current valuation.

It also has other biggies as investors - ICICI and Marc Faber who hold around 3.5 per cent and 4 per cent equity, respectively, besides Volrado Venture Partners (6.06 per cent) and Deutsche Securities Mauritius Ltd (2.11 per cent). Morgan Stanley's investment in Ess Dee comes at a time when it was also reportedly in talks to buy out the Vedanta Resources unit India Foils.

The story of Ess Dee, set up by Sudip Dutta (he apparently bought the sick unit from his employers), has its beginnings from a small scale unit in Jogeshwari in Mumbai with 12 employees in 1991. It started with manufacturing pouches and sachets and had its first year sales of just Rs 1 lakh. In 1994, they were appointed as one of the distributors for Indian Aluminium Company Ltd (INDAL). But the breakthrough came in 1994, when it acquired a sick aluminium foil printing unit in Goregaon on a rental basis, after which it entered the pharmaceutical packaging and printing market. It hasn't looked back ever since.

Ess Dee posted a consolidated net profit of Rs. 16.29 crore and a stand alone net profit of Rs. 13.12 crore for the quarter ended June 30, 2007. Its consolidated net sales stood at Rs. 74.05 crore. Interestingly, the company's chairman and MD Sudip Dutta, 35, the son of an army man in Durgapur, West Bengal, didn't know where his next meal would come from when he was growing up in the 1980s (read a Business Standard profile).

Reliance Communications (RCOM) has finally announced the list of investors in its tower arm Reliance Telecom Infrastructure Ltd (RTIL). They include Fortress Capital, HSBC Principal Investments, Galleon Group, New Silk Route, GLG Partners, Quantum Fund (George Soros) and DA Capital. The breakup of the investments is not provided. The seven investors have picked up 5 per cent in the company for $337.5 million, valuing the company at $6.75 billion or Rs 27,000 crore.

A communication to the stock exchange said that the "sales proceeds from the transaction amounting to Rs 1,400 crore have been received in full, and the capital gains of Rs 1,200 crore ($289 million) have been booked and will be reflected in the results of Reliance Communications Group in the current quarter, i.e. Q2 2007-08."

RTIL's equity valuation of Rs 27,000 crore ($ 6.75 billion) translates into approximately Rs 135 per RCom equity share. RCOM's remaining 95 per cent stake in RTIL is valued at $6.40 billion (Rs 26,000 crore). But what is important is RCOM plans to further unlock value in RTIL. The statement says the company plans to "pursue opportunities for further unlocking of value through an IPO or strategic sale at an appropriate time".

(In the picture: RCOM chairman Anil D Ambani)

Related:

Reliance Communications Sells 5% In Tower Business For $338 Million

Export Development Canada (EDC) has made its first equity investment in India. EDC has invested $7.14 million (CAD 7.5 million) in the second SME fund of the Indian private equity firm Avigo Group. The Delhi-based fund will invest these funds in Indian companies that have "the potential to strategically match the expertise of Canadian exporters in key industries", a release said.

Eric Siegel, President and CEO of EDC, said. "The small and medium enterprises supporting India's booming market are developing at a significant rate and EDC must find new ways to help Canadian exporters take advantage of these tremendous opportunities."

Avigo was founded in 2003, and its founding members include Achal Ghai, a former Director - Western Canada, at CIBC. The Avigo SME Fund I was launched in 2004, from which five investments were made in the manufacturing, auto components and pharmaceuticals sectors. The fund was fully invested in 2005.

Avigo is in the process of completing fund raising for its second fund, the $125 million Avigo SME Fund II. It will have both international and domestic investors like EDC. It will fund SMEs at growth stage, pre-IPO stage and buyouts with an average investment size between $2 million and $7 million.

EDC is Canada's export credit agency, which works with some 6,400 Canadian companies, who export to some 200 countries.

Exclusive: Mumbai Angels, an independent group of angel investors based in the city, has invested in an unnamed airline ticketing company, which is expected to launch a distressed inventory sales engine very soon. This will be the fourth investment of Mumbai Angels in the last six months.

The group had earlier invested in companies like mKhoj, a mobile search firm, Madhouse.in, a DVD rental company (which it exited recently when the company was sold to Seventymm.com), and NetElixir, a US-based pay-per-click search marketing firm.

Sources close to Mumbai Angels told VC Circle that it's an existing travel portal, but will be soon converting itself into an online ticketing company that sells unsold, last minute inventory (or distressed inventory). Probably none of the travel portals offers such a service as of now. Indiatimes.com has an auction system, but it still does not offer a complete bouquet of distressed inventory web fares. Competition can come from airline websites, though. For instance, the state-owned domestic carrier Indian recently launched spot fares for executive class. Also, now you can book tickets up to two hours before departure on Indian.

But the idea of aggregating such last minute deals is a good thing.

Also read:

Meet Mumbai's Angels

The buzz is global buyout fund Blackstone Group may be looking to invest $100 million in publicly listed apparel maker Gokaldas Exports. Business Standard reports that Blackstone is looking to pick up 10-15 per cent stake, which will value the company at around $900 million to $1 billion. NDTV Profit also reported last week that Blackstone is a frontrunner for a deal with Gokaldas Exports. Although it's still in the realm of speculation, if the deal goes through, this can become one of the largest deals in apparel sector. Last year, Koutons Retail had raised $22 million from UTI Ventures and Argonaut Private Equity in two deals, which could be the biggest yet in apparel business. A few weeks ago, Avigo Capital Partners invested $5 million in Spykar, a Mumbai-based fashion retail company. They were comparatively smaller.

The Rs 1,000 crore-Gokaldas has a 400-acre special economic zone in Kanakpura, near Bangalore. It works with some 46 factories spread across Karanataka, and employs about 60,000 people directly and indirectly.

Another leading apparel exporter, Delhi-based Orient Craft said in May last year that it would raise private equity and also float an IPO to raise Rs 330 crore in four months. We haven't heard anything after that, though.