Bajaj Capital To Expand With $50 Mn.

Bajaj Capital is planning to raise $50 Mn. to expand it's network. Bajaj Capital is a 4 decade old investment advisory & financial planning firm owned by KK Bajaj.

Sources indicate that Citigroup Venture Capital and Barings Private Equity are among the funds which have shown inclination to fund Bajaj Capital. In addition to being an investment advisory and financial planning company, Bajaj Capital is also a Sebi-approved Category-I Merchant Banker.

The company currently has 170 outlets across the country and is understood to be expanding. Early this year, Bajaj Capital started online trading under the Just Trade brand, which also offers online investment advisory services.

As reported in Business Standard

PE-VC funds may be deemed FDI

According to a latest draft put up on RBI site for public comment, various classes of investors have been broadened with specific mention of PE & VC funds.

"Secondly, the details of investment received in units of venture capital funds from FVCIs are proposed to be separately captured."

Details of investment received from foreign venture capital investors are also proposed to be captured separately. Part B of Form FC-GPR has been modified to capture details of such foreign investors. The date of filing Part B of the form has been extended from June 30 of every year to July 31.

FDI is permitted under automatic & approval route. An Indian company issuing shares and convertible debentures to non-residents under either route is required to submit details of the investment in a two-stage reporting procedure.

In the first stage, receipt of funds is to be reported to RBI within 30 days. In the second stage, the company has to file Form FC-GPR with RBI within 30 days from the date of issuing shares/convertible debentures.
Form FC-GPR was revised in April 2007 by which remittance receiving Indian banks were required to obtain a KYC report on the foreign investor from the overseas bank remitting the amount.

Go to Financial Express for the complete article

Tommy eyes 51% in Indian Business

Tommy Hilfiger, controlled by buyout private equity Apax Partners, is looking at direct ownership of its India operations by bringing in the maximum permissible 51% foreign direct investment (FDI) allowed in single brand retail.

Tommy is looking for direct ownership, buying out perpetual India rights, currently with the Murjani Group.

The Murjanis invested in young Tommy Hilfiger when the American designer introduced his first signature collection back in 1985.

The Murjanis operate Tommy Hilfiger’s core fashion apparel business through an equal joint venture with Arvind Mills, which has 23 outlets across the country at present. The Murjanis have inked similar licensing deals with other Indian corporates like Titan Industries for watches and Welspun for home furnishings. The Murjanis, through their Brand Marketing India Pvt. Ltd. are pumping investment to develop other international fashion brands like Gucci, Jimmy Choo and French Connection. BMI recently raised $10 million through a private placement with VC fund Matrix Partners, for the cash burning realestate intensive business.

Nexus India Capital invests in Organic Farming

Nexus India Capital has invested in Suminter India Organics, a leading contract farming company that focuses on organic produce for the textile and food industries.

Nexus, a $100-million fund, has so far invested in technology, mostly internet and wireless companies. This investment in farming is first of it's kind on the space and may have to do with special emphasis in recent budget on VC investments in this sector.

Sandeep Singhal, Managing Director, Nexus India Capital Advisors, spoke about a huge potential demand for organic products globally.

Suminter, which supplies to buyers in the US and Europe, currently has a farmer network in four Indian states, across 25,000 acres of land. Its network of farmers grow cotton, oil seeds, spices and herbs, in accordance with buyers demand. The company plans to expand its reach to ten Indian states. It will also set up an organic food park with high-end machinery for processing.

As posted here previously, it seems the money is headed for the farms.

Singpore's BAF Spectrum seed fund enters India

Singapore-based BAF Spectrum Pte Ltd made its first India investment last week in Gurgaon-based Le Travenues Technology Pvt. Ltd running the travel search engine IXIGO.COM

BAF is a collaboration between private investors & Singapore government. It's the second investor at the pre-series A (first round) funding stage to enter the Indian market in the last month. Earlier, Singularity Ventures backed by West Asian investors launched operations in the country.

The firm, which typically invests between $500,000 (Rs2 crore) and $1 million, has a dedicated corpus of $14 million. Thus far, it has funded five companies headquartered in Singapore.

Several companies in the online travel space here have received funding in the last two years, including Bangalore-based Yatra Online Pvt. Ltd, Mumbai-based Cleartrip Travel Services Pvt. Ltd and New Delhi-based Makemytrip India Pvt. Ltd.

Over the last 12-18 months, many sources of seed capital have sprung up, including New Delhi-based India Angel Network, Mumbai-based Seedfund and Mumbai Angel Network and Bangalore-based Erasmic Venture Fund.

The Singapore government, under its Business Angel scheme (BAF comes under this), grants $7 million angel money to be invested in start-ups to a group of private investors on the condition that they match the amount with their own capital. As an incentive, the government returns a third of its profits on exits to the investors. It is a hybrid model that combines the Band of Angels mode of investment with government grant distribution. In markets outside Singapore, the angels put in their own money.

The full article can be read on Mint

SIDBI Finanancial Inclusion 2000 Cr. Package

SIDBI will roll out new equity scheme for SME through Rs.2000 Cr. risk capital fund announced in budget.
Besides the funds allocated in the Budget, SIDBI will seek participation of private equity players and venture capitalists for injecting risk-bearing equity capital into small and medium enterprises (MSME), the bank's Deputy Managing Director Rakesh Rewari said.
This 2000 Cr. fund is in addition to another Rs.2000 Cr. fund set aside for refinancing to MSME.

"Equity financing is very low in the MSME sector. Of the total finance raised by small firms, only five per cent is contributed towards equity and the rest 95 per cent is in the form of debt," Additional Secretary in the MSME Ministry Jawahar Sircar said. The large industries, on the other hand, manage to meet 45 per cent of their fund requirement in the form of equity, he said.

Earlier this week, SIDBI Venture CEO A K Jaipur said at an MS ME seminar here that availability of equity capital can be increased by promoting more Angel Clubs in the country. "Angel clubs have limited presence in India. There are more than 2,500 in the US compared to only a handful in India," he had said.
Read the full article on Financial Express

VC gets Pass Through Status in Budget

From the Finance Minister’s Union budget speech:

“Venture capital funds are a useful source of risk capital, especially for start-up ventures in the knowledge-intensive sectors. Since such funds enjoy a pass-through status, it is necessary to limit the tax benefit to investments made in truly deserving sectors. Accordingly, I propose to grant pass-through status to venture capital funds only in respect of investments in venture capital undertakings in biotechnology; information technology relating to hardware and software development; nanotechnology; seed research and development; research and development of new chemical entities in the pharmaceutical sector; dairy industry; poultry industry; and production of bio-fuels. In order to promote business tourism, I also propose to allow this benefit to venture capital funds that invest in hotel-cum-convention centres of a certain description and size“

Angels to the rescue

Heres an article in the Hindustan Times which talks about the irony in the PE/VC space in India. It says "While the country is awash with foreign money flowing into private equity, early stage funding, what many believe to be the essence of venture capital, is not quite abundant. But successful Indian entrepreneurs who have been there and done that are trying to solve this problem in their own way with a network of “angels” — individuals who provide seed capital and some hands-on advice and help to boot, often by sitting on the boards of start-ups."

We hope the band of angels is always on the increase. Read the complete article on HT online

Nasscom floats a 100 cr VC fund for IT start-ups

In December 2005, Nasscom wanted the Union Government to set up a separate venture fund to fuel innovation in the software products space.

A year and a half later Nasscom is set to launch a Venture Fund, with a corpus of Rs.100 crs, along with Hyderabad-based ICICI Knowledge Park, an arm of the ICICI bank.

Disclosing this to CyberMedia News here, Rajdeep Sehrawat, vice president of Nasscom, said “We have earmarked Rs 100 crore to fund IT start-ups in India, which are involved in IP-creation. These companies could be anyone who is working on automotive electronics, wireless and broadband, life sciences, medical devices and the like.”

The venture fund is expected to be in place by October this year. The fund will be looking at disbursing seed capital or angel funding, which other venture capital firms hesitate to enter. It intends to finance early start-ups, in their ideation stage, as this is where the liquidity crunch is felt the most.

Such initiatives promise to offer a lot of opportunities to an entrepreneurial mind. One hopes to see more such initiatives being taken in the future.

DVD rental company gets $228, 000 from Angel Investors

After the Bangalore-based Seventymm.com, another online DVD rental company, this time in the nation’s capital, gets venture funding. Delhi-based Madhouse Media has closed an angel round of $228,000 (Rs. 1.05 crore) from Band of Angels in Delhi and Mumbai, and other couple of investors.

First-time entrepreneurs Sameer Guglani, Nandini Hirianniah and Ankur Agrawal founded the company in December 2004. Madhouse has both online and offline presence and it claims to be the only one to have such a model. The company is currently focused on North Indian markets – Delhi-NCR, Chandigarh, Panchkula and Mohali regions. It plans to do a national roll-out in the next two years.

It is currently working on some key business alliances to serve the customers better; one such alliance being with Netkode Solutions, which provides end to end technology solution to Hollywoodclicks.com, Singapore’s largest online DVD rental service. Netkode will work as a technology partner with Madhouse.

Matrix Partners India invests Rs. 20 crores in digital signage company vJive

Matrix Partners India has invested Rs. 20 crores in vJive, an out-of-home media and digital signage network owned by Digital Music India (DMI) Pvt. Ltd. has received a VC funding of Rs. 20 crores. This is the first of the tranches of an overall Rs 100 crores for the company. Matrix’s Avnish Bajaj has joined the board of directors of DMI.

This is Matrix’s fourth investment in the year. It had earlier invested $7 million in Seventymm.com, an online DVD rental company, $5.5 mn in Moods Hospitality, the owners of food chain Yo! China Restaurants, and an undisclosed sum in a stealth mode start-up Four Interactive.

Lightspeed invests $29.5m in Bangalore net companies

Venture capital investors are making a beeline for India. Following Texas Pacific Group Ventures and Sherpalo, Silicon Valley-based venture capital fund Lightspeed Venture Partners, with $1.5 bn of assets under management, has invested in two Indian companies – Mercantila and TutorVista – both based in Bangalore.

Mercantila, a collection of hundreds of online specialty stores serving the US and Canadian markets, has received funding upto $22.5 mn, while online tutoring and test preparation company TutorVista has received $7 mn.

Lightspeed has recently raised a $475 mn fund, one-third of which would be invested in assets outside the US. Israel, China and India would be major recipients of this allocation. India itself may see investments in the range of $50-100 mn. Lightspeed is keen to make a mark in the growing Indian market and intends to establish an Indian office in the coming 12 months.

Read more in The Economic Times, Red Herring and ContentSutra.com.

Matrix Partners Invests In Stealth Start-up Four Interactive

Matrix Partners is making investments and news by the day. After investing $7 mn in Seventymm.com, an online DVD rental company and $5.5 mn in Moods Hospitality, owner of the Yo! China brand of Chinese food outlets, the $ 150 mn cross-sector fund has bought an undisclosed stake in Bangalore-based stealth mode start-up Four Interactive. As per the company website, Four Interactive is “building easy to use services which lie at the intersection of mobile, content and web”. Four Interactive has been founded by ex-Microsoft execs Kiran Konduri and Shriram Adukoorie. Kiran Konduri was the founder of Zephyr Software, later acquired by Infospace. Shriram Adukoorie is the former country head for MSN India and South Asia.