Software billionaire Azim Premji's private equity arm has also put its hat in the ring for a piece of Capt. GR Gopinath's new venture Deccan Cargo. The end-to-end logistics venture is raising $50-60 million at a valuation of around $150 million. PremjiInvest is looking to invest around $30-35 million, and is open to co-investment to meet the required amount, reports Economic Times. VCCircle does not have independent confirmation of this development.
Earlier it was reported that ADAG's Reliance Equity Advisors is also in talks to invest upto $50 million for a 33% stake in Deccan Cargo. Others who are in the race include US-based New Enterprise Associates (NEA) and Intel Capital.
Edelweiss Capital has been given the mandate to raise $50 million by Gopinath. Earlier media reports have suggested that he may sell his 10% stake Deccan Aviation to part finance the venture.
Why is Deccan Hot?
Well the investors would sure be vying to invest in Gopinath's new venture, as early investors in Deccan Aviation made a killing. Investors in Deccan Aviation included Brindavan Beverages - which made 100 times the money invested- and others like Capital One, ICICI Venture and some NRIs.
Also in the current economic downturn, investors would be looking for experienced entrepreneurs, who are much safer bets. PremjiInvest has recently invested Rs 80 crore in auto retail chain Carnation, started by former Maruti MD Jagdish Khattar.
India's logistics sector is also a large, highly unorganised market and Gopinath's Deccan Cargo plans to provide complete logistics solutions. It will also provide ground logistic services such as using roads and railways, besides air transportation.
Bringing in ADAG as investors will not only give Gopinath the funds to expand, but may also bring in business as Anil Ambani has big presence across telecom, entertainment, infrastructure and financial services.
Anil Ambani has been interested in aviation for a long time. Last year, he was in the race for Deccan Aviation, but was edged out by Vijay Mallya, who has now merged it with his Kingfisher Airlines. Anil Ambani was also reportedly in race to buy out SpiceJet, which later raised money from Wilbur Ross and Goldman Sachs. Anil Ambani has investments in cargo space as Reliance Capital picked up a 44% stake in Bangalore-based DTDC Courier & Cargo in early 2006.
NEA recently hired ICICI Venture's Bala Deshpande, who used to sit on the board of Gopinath's low cost carrier airline Deccan Aviation on behalf of ICICI Venture. Her earlier relationship will sure come in handy to NEA.
Intel Capital, which is the venture arm chipmaker Intel, is interested in investing in Deccan Cargo as the latter is building a state-of the art integrated IT system. Deccan plans to invest $25 million into this system, which will include online "track and trace" facilities and help company cut operational costs. Infosys is believed to have bagged this contract.
Also last year, Sudheer Kuppam, Managing Director of Intel Capital, VC Circle that they are now looking at a stage and sector-agnostic approach.