The next set of innovation for India Inc. will revolve around the ‘Big Data’ or data analytics, according to Pramod Haque, managing partner at the US-based venture capital firm Norwest Venture Partners. Speaking at the recently concluded VCCircle Bengaluru Investment Forum, Haque said that the impact of big data would be akin to what ERP did for the information technology sector, which led to the growth of Indian IT companies.

“This is a huge opportunity and there is a need for companies to do predictive analysis,” he said.

Big Data, as they are called, are data sets which are beyond commonly used storage tools to capture, manage and process data within a specific time. Each day, billions of users are adding information to the huge ocean of data. As storing such information gets cheaper, entrepreneurs, business consultants, scientists, mathematicians and physicians are all diving deep to make sense of it all.

Sharing his thoughts on the evolving deal-making scenario in the country, Haque said that the Indian companies would also see mergers and acquisitions (M&A) activity increasing over the next five years. “Larger companies are likely to acquire smaller companies as the Indian companies are reaching a mature stage,” he said.

But he cautioned that the Indian IT services companies would face significant challenge in the form of wage inflation as salaries would be growing faster than other markets. “A lot of Indian companies would be under pressure to deploy technologies which enhance their productivity and automate processes,” he said.

There was a virtual silence as hundreds of delegates took down notes, along with the pearls of wisdom, from the veteran venture capitalist who has been a frequent member of the Forbes’ annual global Midas list of top tech dealmakers.

The VCCircle Bengaluru Investment Forum, 2011, turned out to be the largest investment forum in South India, bringing together more than 400 delegates – ranging from CEOs and CXOs of large and mid-sized companies from all South Indian states to partners from private equity and venture capital funds, investment bankers, sector specialists and eminent speakers.

The event saw speakers like VT Bharadwaj (MD, Sequoia Capital), Ashwini Kumar (COO, Nitesh Estates Ltd), Sunish Sharma (MD, General Atlantic), Suresh Soni (MD, Nova Medical Centers Pvt Ltd), Sanjeev Dasgupta (president, ICICI Real Estate Fund), S.G. Shyam Sundar (Sr. MD, IDFC), Rajiv Vasudevan (founder & CEO, Ayurvaid Hospitals) discussing and debating the opportunities present in various sectors and also in various cities.

With rapidly increasing disposable middle-class income, consumer space undoubtedly remains the most sought-after sector for the investment fraternity, according to panellists at the event.

“One has to understand if a consumer business is a strong brand, which is well run. Then by definition, it is a high-return business,” said Niten Malhan, MD at private equity firm Warburg Pincus.

Healthcare, among other sectors, is poised to see an increase in the deal-making activity, but needs to overcome some of its challenges. Ashwin Naik, CEO of six-year-old Vaatsalya Healthcare that focuses on tier II & tier III cities, pointed out, “As we specialise in primary and secondary care, the biggest challenge in this space is the lack of doctors and nurses. That’s probably why it’s not a red-hot sector yet. When you have everything but you cannot execute those because there’s a dearth of trained professional, you are always pitted against an on-going challenge.”

One key take-away from the event was that investors would need to fish deeper beyond the large cities in India. “In the next decade, growth and opportunities to make deals will emerge in tier II cities like Mysore, Madurai, Mangalore, Vizag, Coimbatore and Trivandrum,” said Guhan Subramaniam, investment manager of IL&FS Private Equity.

Almost all investors were unanimous in the view that it’s an extremely difficult deal-making environment as promoters are asking for very high valuations.

“It is getting tough to do deals,” said Raja Kumar, MD of Ascent India Capital Advisors and an industry veteran who also attended the forum.

Get a dope on what the stakeholders have to say about the VCCircle Investment Forum, held on June 24 at the ITC Gardenia, Bengaluru, here:


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