Canbank Venture Capital Fund Ltd (CVCFL), a subsidiary of public sector lender Canara Bank Ltd, has invested Rs 11 crore (around $1.7 million) in Surat-based security services firm Shiva Industrial Security Agency Pvt Ltd (SISA) by way of equity shares and convertibles for a minority stake, according to a press release.
The investment is being routed through CVCFL's Emerging India Growth Fund (EIGF), which was launched in June 2010 with a corpus of Rs 500 crore.
VCCircle was the first to report that Canbank Venture will be investing in SISA.
Founded by ex-army personnel one-and-a-half decades ago, SISA provides security & cash management services including secure transportation of cash & valuables, ATM replenishment, ATM first line maintenance, doorstep banking, etc.
This is first time the company has raised an external funding since its inception. It will utilse the fund towards adding branches to boost its existing guarding strength and also to increase its cash van fleet strength by adding 100 more vans in financial year 2015-16.
“The company also proposes to give added thrust to high margin business segment like Emergency Response Services & Event Management Security services,” Sameer Sharma, managing director of SISA said, adding that SISA is looking to clock a turnover of Rs 150 crore by the end of financial year 2017-18.
Currently, the firm has over 9,000 guards and more than 100 cash vans; its clients include HDFC Bank, Indian Oil, Essar Steel, Dena Bank and Adani Power Ltd.
Led by Manoj Kumar, SISA has presence in Chandigarh, Mumbai, Surat, Goa, Chennai, Coimbatore, Bharuch and Bangalore. It has 15 branches and five regional offices.
CVCFL, set up in 1989, was formed to invest in small & medium enterprises in various sectors. It has so far set up five funds with a total corpus of Rs 620 crore.
Last year, it had said that it is targeting its sixth venture capital fund with a target corpus of Rs 500 crore.
Recently, it acquired a minority stake in Jaipur-based Shera Energy Pvt Ltd (SEPL) for about Rs 10 crore (approximately $1.6 million).
Security services business has attracted PE funding in the past with some of the big funded players in the business such as Delhi-based private security services company SIS, which is backed by CX Partners; and Tops Security, which counts private investor Rakesh Jhunjhunwala, ICICI Venture and Everstone Capital as a shareholder.
While CX Partners had acquired 20 per cent stake in SIS for Rs 300 crore in 2013, Jhunjhunwala had backed Tops Security over nine years ago while ICICI Venture and Everstone came in during 2007.