TVS Shriram Growth Fund I has invested up to Rs 35 crore in facilities management company Dusters Hospitality Services Pvt Ltd and Total Solutions Facilities Management Ltd. The two companies, run by brothers Shamsher and Jasmer Puri respectively, are merging their operations. While Dusters is based out of Bangalore, Total Solutions
is based in Mumbai. TVS Capital Funds Ltd, which manages Rs 600 crore TVS Shriram fund, has also announced opening of an office in Mumbai.
The funds will be used for operational growth capital and inorganic opportunities. The combination of Dusters and Total Solutions will have 16,000 employees and over 600 client sites. “We believe that there is a lot potential for organised players in the facility management services to gain share as clients demand higher standard services, stricter compliance, and complete bouquet of services across multiple geographies,” said Gopal Srinivasan, chairman of TVS Capital. The deal comes close after its recent investment in books and music retail chain Landmark Ltd, a part of Tata Group's Trent Ltd.
Facilities management is a business that has boomed along with the fast paced growth in India's real estate sector during 2007 and 2008. The expansion of corporates, hospitals, hotels and retail companies has increased the demand for such professional services. Though the realty sector had to face a tough times recently, the growth in services like security, housekeeping and catering continues to be predictable.
The sector, which highly unorganised, is expected to reach Rs 3,800 crore in market size by 2012. The space is also attracting attention of dealmakers. An increasing interest from PE players can be seen with companies like BVG India and Radiant Hospitality getting funding recently from Kotak Private Equity and Lighthouse Funds, respectively. It has also witness multiple M&A deals this year.
For Chennai-based TVS Capital, the Mumbai office will be its second. “This will help us leveraging opportunities for our investors through significantly increased networking, access to larger ecosystem, specialists and increased deal flow,” said D. Sundaram, vice chairman and MD at TVS Capital.