Indiamart raises Series C funding from Amadeus Capital, WestBridge & others

IndiaMART InterMESH Ltd, which runs an online B2B platform for small and medium businesses connecting global buyers with suppliers under the brand Indiamart, has raised an undisclosed amount in Series C funding led by Amadeus Capital.

WestBridge Capital, Accion Frontier Inclusion Fund (managed by Quona Capital) in addition to existing investor Intel Capital, participated in the funding round.

The capital raised will be used to further power its B2B business by scaling up Indiamart.com along with Tolexo.com, the online marketplace for businesses it launched in 2014, it said in a statement.

“The Indian B2B sector itself is set to grow by 2.5 times and touch $700 billion by 2020. Given the socio-political and environmental forces in the country, we foresee larger strides being taken by MSMEs in the coming years,” Dinesh Agarwal, founder and CEO of IndiaMART said.

VCCircle had earlier reported that Indiamart had initiated talks to raise as much as $200 million for Tolexo Online Pvt Ltd.

IndiaMART has put in an initial capital of around Rs 100 crore to build Tolexo. Tolexo competes with other B2B focused e-com sites such as Industrybuying.com.

Indiamart co-founder Brijesh Agrawal is the CEO of the firm. Early last year, the company roped in Harsh Kundra as co-founder and head of product and technology. It also counts Navneet Rai, co-founder, Inkfruit.com (merged with private label fashion e-tailer Zovi.com back in 2013), as a co-founder.

Backed by Intel Capital and Bennett, Coleman & Company Ltd (BCCL), IndiaMART offers products that enable SMBs to generate business leads and use business information (finance, news, trade shows, and tenders, etc.).

Indiamart was founded by Dinesh Chandra Agarwal and Brijesh Agrawal in 1996.

IndiaMART was styled on the lines of China’s Alibaba. However, while Alibaba ventured into B2B and B2C online commerce space and scaled up to become the world’s largest online seller, IndiaMART confined itself to matching buyers and sellers.

Indiamart claims that its platform enables over 24 million buyers to search from over 30 million products and get connected with over 2.1 million suppliers.

This is the first investment in an Indian company by UK-based technology venture capital firm Amadeus Capital Partners, which had entered the Indian market early last year. The venture capital firm, with some £500 million of assets under management, had appointed Bhavani Rana, who was the investment director at Intel Capital, as a partner to lead the team in India.

Founded in 1997, Amadeus Capital Partners has made more than 90 investments in industries ranging from communications and networking and software, to e-commerce from 10 funds totaling over $1 billion in cumulative commitments.

The firm, which was co-founded by Hermann Hauser, has a presence across the US, Sweden, South Africa, Brazil and now India.

“The investment fits Amadeus’ strategy of backing entrepreneurs benefiting from increased penetration of digital technology in emerging markets. Through its subsidiary Tolexo, IndiaMART is able to utilise data to help consummate transactions within the platform,” Rana said.

Sun Capital

Banks disburse over Rs 1.15 lakh crore under PM Mudra Yojana

Banks have so far disbursed over Rs 1.15 lakh crore under Pradhan Mantri Mudra Yojana (PMMY), financial services secretary Anjuly Chib Duggal said on Tuesday.

Micro Units Development and Refinance Agency Ltd (Mudra) focuses on 5.75 crore self-employed who use funds totalling Rs 11 lakh crore and provide jobs to 12 crore people.

Under PMMY, loans between Rs 50,000 and Rs 10 lakh are provided to small entrepreneurs.

"We have been working with Mudra. It has been a runaway success ... we are looking at Rs 1.15 lakh crore plus right now," she said at an event organized by MFIN here.

The scheme was launched by Prime Minister Narendra Modi in April last year.

Three products available under the PMMY are Shishu, Kishor and Tarun, to signify the stage of growth and funding needs of the beneficiary micro unit or entrepreneur.

Shishu covers loans of up to Rs 50,000 while Kishor covers those above Rs 50,000 and up to Rs 5 lakh. Tarun category provides loans of above Rs 5 lakh and up to Rs 10 lakh.

With regard to Banks Board Bureau, Duggal said, she would be meeting newly appointed chairman Vinod Rai this week to discuss operationalisation of this specialised body.

Last month Rai, a former CAG, was appointed head of Banks Board Bureau by Prime Minister Narendra Modi.

The bureau will give recommendations on appointment of directors in public sector banks and advise on ways to raise funds and mergers and acquisitions to the lenders.

There are 22 state-owned banks in India including SBI, IDBI Bank and Bhartiya Mahila Bank.

Besides, she said that there would be meeting of heads of the bank on March 22 to discuss about the recently launched crop insurance scheme by Prime Minister.

The crop insurance scheme scheme has already been approved by the Cabinet that would replace the existing ones to ensure that farmers pay less premium and get early claims for the full sum insured.

Investment Banking

Banks with strong networks will find takers

Mumbai The government, which recently stepped up focus on consolidating weaker public sector banks (PSBs), plans to reduce the number from 27 now to six or seven larger banks.While market capitalisation is a reflection of how the Street (investors, analysts, etc) views the bank's core fundamentals, the current state as well as the future prospects, a detailed look at the nine months' data of these banks provides some insight on their financial and business condition.In terms of asset quality, for instance, Indian Overseas Bank (IOB) and UCO Bank are the worst placed as they had the highest gross non-performing assets (NPA) at 12.6 per cent and 11 per cent, respectively, as on December 31, 2015.Dena Bank was the third on this list with gross NPA ratio of 9.9 per cent. 

However, if one adds the restructured assets, it would reflect the real asset quality picture of a bank. While the latest figures of total stressed assets for many banks are not available, the situation is not alarming, say analysts.Many PSBs also have low levels of capital to fund growth as well as any fresh losses that they may witness on account of bad loans. For example, while Dena Bank reported a net loss for the nine months ending December 31, 2015; its Tier-1 capital of 7.1 per cent is the lowest amongst its peers. United Bank's Tier-1 capital ratio, too, stood at 7.1 per cent in this period. Again, not all banks have declared their Tier-1 capital ratios as at the end of the December 2015 quarter.Notably, while PSBs consolidation will be largely driven by regulations, larger banks would not want to buy banks having low capital adequacy as well as poor asset quality, unless they prove to be of strategic importance. A key factor that will aid consolidation will be a bank's branch network. Historically, banks having larger presence in one region have bought smaller banks having stronger presence in another region. This ensures there is minimal overlap and the businesses are complementary in nature. The key hurdle and integration challenge, though, will be the employee unions in some of the PSBs that might resist such mergers and acquisitions. Nevertheless, with the advent of digital banking, the attraction of a branch network might not be enough.Analysts, however, believe most smaller and relatively weaker PSU banks could be potential takeover targets.Vaibhav Agrawal of Angel Broking says, "United Bank, IOB, OBC, Dena Bank, Vijaya Bank, Bank of Maharashtra, Andhra Bank, Indian Bank, Corporation Bank, among others, could be key takeover targets. The prime criteria will be complementary network, capital adequacy, asset quality, unions and actual integration of this merger."

Sun Capital

Indiabulls Group to invest Rs 25,000 crore in Haryana over seven years

MUMBAI: Mortgage lender Indiabulls Housing Finance and its group company, Indiabulls Real Estate will invest Rs 25,000 crore in Haryana over the next seven years. The group has entered into a Memorandum of Understanding with the government of Haryana for the same, the company said in a statement.


Indiabulls Group, whose founder, Sameer Gehlaut has origins in Haryana, is headquartered in Gurgaon, and has pan India operations with offices in 200 locations across the country.

The pact was inked during the "Happening Haryana Global Investors Summit" wherein Indiabulls Groups has made an in-principle commitment to invest Rs 25,000 crore during the said period.

The investment will be made through direct lending for home loans as well as indirect lending to the developers of various projects, particularly in the affordable housing segment.

The group already has exposure in NCR, both as a lender as well as a developer and is aiming to scale it up by tapping into the growing demand for affordable housing in the backdrop of "Housing for all by 2022".

Sun Capital

DRT freezes Vijay Mallya’s sweetheart deal with Diageo

Debt recovery tribunal says payment to Vijay Mallya can’t be made until case filed by SBI, other lenders is disposed of

Bengaluru: UB Group chairman Vijay Mallya received a setback on Monday when the debt recovery tribunal (DRT) in Bengaluru blocked him from getting his hands on a $75 million payout by Diageo Plc., responding to an application by creditors led by State Bank of India (SBI).

The tribunal said Mallya cannot access the money until a case filed against him by SBI is settled. The order came in response to one of the four so-called interlocutory applications filed last week by SBI, which also demanded the arrest of Mallya, the impounding of his passport and a full disclosure of his assets and liabilities.

SBI has also moved the Karnakata high court for similar directives.

Banks owed money by Mallya’s grounded Kingfisher Airlines have the “first right” to the Diageo money, according to SBI.

The tribunal on Monday also directed London-based Diageo and its Indian unit United Spirits Ltd (USL) not to disburse any money to Mallya before the case is disposed of. It set the next hearing for 28 March.

Sun Capital

Sebi may peg M&A ‘control’ cap at 25%

Regulator’s move is aimed at removing ambiguities that companies confront during takeovers

Mumbai: The market regulator is set to clarify what the term ‘control’ means in the context of mergers and acquisitions (M&As) by pegging the shareholding threshold of an acquirer at 25%, two persons familiar with the development said.

The move is aimed at removing ambiguities that companies currently confront during takeovers, one of the two persons said, requesting anonymity.

Currently, the definition of ‘control’ under the Substantial Acquisition of Shares and Takeovers (SAST) Regulations, 2011—popularly known as the Takeover Code—doesn’t specify a threshold for shareholding.

“The numerical threshold for determining control is a globally accepted norm and should be the prescribed criteria along with the other factors which may signify control,” said Tejesh Chitlangi, a partner at law firm IC Legal.

The current takeover code states that an acquirer is in ‘control’ only if the board of the company that’s being acquired gives the former the right to appoint a majority of the directors, and have the final say on management and policy decisions.

The control of management or policy decisions is through shareholding or management rights or shareholders’ agreement or voting agreements.

“The Securities and Exchange Board of India board will clear a discussion paper on Saturday, which proposes to peg the numeric threshold of voting rights (shareholding) at 25% and giving protective rights to the acquirer,” said the second person, who also declined to be named.

A Sebi spokesperson did not respond to an e-mail seeking comment.

According to the discussion paper, there could be a framework for protective rights with an exhaustive list of rights that do not lead to acquisition of control.

These protective rights would be granted to the acquirer if they are cleared by 51% of the minority public shareholders.

“While it will be important to have a list which considers the commercial realities of merger and acquisition transactions, it may be a practically onerous task to have an exhaustive list that captures all the exempted protective rights and Sebi may need to grant an exemption on case-to-case basis,” the second person said.

According to Lalit Kumar, partner at J. Sagar Associates, there is currently no clarity on whether or not protective (veto) rights to investors will lead to control.

“This issue came up in the matter of Subhkam Ventures where Sebi held that protective rights lead to control. However, in appeal to the Securities Appellate Tribunal (SAT), SAT held that protective rights only lead to negative control and not positive control,” Kumar said.

“The matter went in appeal to the Supreme Court, which did not pass any order on this issue but said that SAT’s order will not act as a precedent. Therefore, presently, there is no decided case on this issue although the general view is that protective rights do not lead to control,” he explained.

Kumar’s reference is to private equity investor Subhkam’s 17.9% stake in MSK Projects. In 2007, when it bought the stake, Subhkam sought and received several so-called negative rights (such as the power of veto on key decisions). In 2008, Sebi ruled that this constituted control. On appeal, SAT ruled in favour of Subhkam. Sebi appealed the case in the Supreme Court which dismissed the case. However, because it said SAT’s order would not be a precedent, private equity investors are still not sure as to whether negative rights such as the one Subhkam had constitute control (such rights are common in agreements between promoters and private equity firms).

Some in the legal fraternity say the definition of control cannot be set in stone.

“The question of control is a nuanced one primarily of fact and secondly of law… Anything set in stone on defining control would lead to false positives and negatives. Sebi should adopt a more nuanced approach and go by court rulings as precedents,” said Sandeep Parekh, founder, Finsec Law Advisors.

Sebi first started reviewing the definition of control in 2014. Finalizing a proposed framework took longer than expected, nearly 20 months, in wake of the number of suggestions.

Sebi decided to re-examine the definition of control following the 2013 acquisition of a 24% stake in Jet Airways (India) Ltd by Abu Dhabi-based Etihad Airways PJSC for Rs.2,058 crore.

In May 2014, Sebi ruled that the deal did not attract the provisions of the Takeover Code, as it found a lack of substantial controlling powers with Etihad after the transaction.

Private Equity

Apollo Tyres enters two-wheeler segment with Acti series

To invest Rs. 4,000 cr on capacity expansion at Chennai centre.

Apollo Tyres has entered the two-wheeler segment with the launch of the ‘Acti’ series.

One of the leading tyre makers in the country, the company also said that it will invest Rs. 4,000 crore in the next financial year to expand its bus, truck tyres in Chennai.

Designed and developed at the company's global R&D centre in Chennai, the Apollo Acti series for bikes and scooters would cover nearly 85 per cent of the replacement market for two-wheeler tyres in India, the company said on Monday.

“The presence in the two-wheeler segment will help the company cement its leadership position in India. The Apollo Acti series will provide the best value proposition to our customers along with an enjoyable driving experience,” Onkar S Kanwar, Chairman, said here at the launch.

The two-wheeler category, which is growing at a CAGR of 8.5 per cent in India, holds huge potential for tyre manufacturers, the company said.

The company said it is looking at selling 1.20 lakh tyres each month initially, going up to five lakh tyres each month in the next two years. However, the company is sourcing the tyres from one of its vendors in Chennai and will decide on setting up a new plant or investment for two-wheeler tyres in the future.

“It depends on demand and branding of the tyres. We will be outsourcing the tyres for the next two years and we will decide on a greenfield or brownfield when the time comes,” Neeraj Kanwar, Vice-Chairman and Managing Director, told reporters.

To expand its existing tyre plants and capacities, Kanwar said Apollo will invest $600 million (around Rs.4,000 crore) next financial year to enhance capacity at its plants in India (Chennai) and abroad (Hungary).

He added that the company is also in the process of doubling the capacity of its Chennai plant to 12,000 truck and bus radials a day from 6,000 earlier.

The company’s shares closed at Rs. 170.35 on the BSE on Monday, up 2.65 per cent from the previous close.

Fund Raising