Headland Asian Ventures Fund 3 Limited (HAV3), a fund advised by Headland Capital Partners Limited (Headland) (formerly HSBC Private Equity (Asia) Limited) has invested Rs 40 crore in Microqual Techno Ltd,  a telecom infrastructure provider. Sources close to the development told VCCircle that the PE fund has picked up a minority stake less than 15%, valuing the company at around Rs 300 crore.

This is the second round of institutional funding into Microqual, which raised about Rs 40 crores from IndoUS Venture Partners, JAFCO Investment (Asia Pacific) Ltd and BTS India Private Equity Fund in July 2007. None of the investors have exited in the current round of capital infusion, Mahesh Choudhary, Founder and CEO, Microqual Techno told VCCircle.

This is also the first deal of HSBC Private Equity under a new brand name- Headland Capital Partners. Recently, the management team of HSBC Private Equity (Asia) Limited or HPEA, the regional PE arm of HSBC Group Holdings PLC (HBC), completed its buyout of the company and re-christened it Headland Capital Partners Ltd.

Headquartered in Mumbai, Microqual Techno Ltd. is a total product and service provider of end-to-end infrastructure solutions to wireless telecommunication operators (GSM, CDMA, WiMax and 3G) with strong execution capabilities. It manufactures and supplies passive microwave components, radio frequency antennas and cables, in-building solutions materials, tower accessories, electrical and mechanical site materials required for telecom infrastructure installation.

It also provides  complete lifecycle of services from site implementation, managed services, engineering, procurement & construction and project management. Microqual has three  manufacturing facilities at Aurangabad, Bengaluru and Rudrapur, and a R&D department at Bengaluru.

About 50% of the revenues comes from the development of products and the rest from the services.  The company registered revenues of about Rs 235 crore last year and has a projection of about Rs 350 crore in the next year, Choudhary added. Choudhary added that they will come up with a public offering in 2011.

"The objective of our company is to reduce opex, capex, and space (ROCS) for its customers by bundling its products with services and offering end-to-end solutions under a single umbrella," said Choudhary.

The monies raised in this funding will be utilised for expansion in Bangladesh, Nepal, Africa & other emerging markets, strategic acquisitions, and implementing newer technologies. Choudhary added that the company is charting an inorganic growth plan and is looking at acquisition opportunities which provide them with “new concepts, new technologies and newer areas”. It is looking for technology solutions such as those which can provide multi- antennae sharing and even those that can reduce the time in building up of towers.

Choudary added that much of the focus will be on product enhancement, R&D, inorganic expansion and foraying into newer geographies both internationally and domestically. At present, the company is looking to expand more deeply into the Northern and Western regions of the country.

Microqual clientele consists of Airtel, orange, Reliance Infocomm, BPL Mobile among others on the cellulars service providers side and Ericsson, Alcatel and Nokia among others on the OEM side.

Telecom infrastructure providers have seen a huge traction by PE funds in the recent past. Some of the deals in the space include :  Macquarie-SBI Infrastructure Fund's infusion of $30.4 million into Viom Networks, Small Industries Development Bank of India putting in $0.2 million  in SM Wireless Solutions and Zephyr Peacock India fund II investing $4.8million into Metro Wireless Engineering.

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