The funds will be utilised for expansion in Bangladesh, Nepal, Africa & other emerging markets, strategic acquisitions, and implementing newer technologies. The company had secured the first funding in July 2007 from IndoUS Venture Partners, JAFCO Investment (Asia Pacific) Ltd. and BTS India Private Equity Fund.

Speaking on the development Mr. Mahesh Choudhary, Founder and CEO of Microqual Techno Ltd. said, “The telecom industry continues to grow at a rapid pace and has a long term potential both in Indian and emerging markets. To be a differentiator in the telecom industry we believe that we have to think out of the box to drive costs down for our clients. We would like to use existing resources for alternate applications which will enable us to continue to redefine competition.”

He added, “We have been able to grow the company from strength to strength by working on the core problems of our customers and designing innovative solutions to address the same. Microqual fully understands the changing needs of mobile operators in an ever increasing price competitive environment and their customer’s need to build and operate networks with optimal investment and yet “go to market” in shortest timeframe.”

James Savage, Partner of Headland also commented on the investment, “Microqual has grown into a leading provider of telecom infrastructure products and services in the Indian market. With some exciting new products and innovative services being launched in India and significant potential to service its customers overseas, we believe that Microqual is well positioned to capitalise on these opportunities.”

Alok Gupta, Partner of Headland based in Mumbai also commented on the investment, “We were attracted to Microqual due to its ability to understand and address the opportunities in the dynamic telecom sector. We look forward to working closely with the management team to realize their business and growth aspirations.”

Since inception in 1999, Microqual has demonstrated rapid growth from being just a component supplier to becoming one of India’s leading total service providers of telecom infrastructure.

About Microqual Techno Ltd.
Microqual Techno Ltd. is a comprehensive infrastructure solutions provider in the telecommunications sector. 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. The company provides complete lifecycle of services from site implementation, managed services, engineering, procurement & construction and project management. Microqual has three state of the art manufacturing facilities at Aurangabad, Bengaluru and Rudrapur, and a dedicated R&D department at Bengaluru.

For more information, please visit: www.microqual .com

About Headland Capital Partners
Headland Capital Partners Limited, formerly, HSBC Private Equity (Asia) Limited, has been advising private equity and venture capital funds since 1989. Headland endeavours to be a trusted and commercially-minded investment partner for entrepreneurial management teams in Asia and strives to assist these teams to build upon or achieve industry leadership positions for their businesses. The firm believes such partnerships support these companies and their management teams to attain sustainable financial success while delivering attractive returns for its advised funds.

During its history, Headland has advised six private equity and three venture funds, as well as several country-specific funds, with aggregate capital of approximately US$3.4 billion. Current active funds, with committed capital of approximately US$2.4 billion, include: The Headland Private Equity Fund 6 L.P., The Headland Private Equity Fund 3 Limited, The Headland Asian Ventures Fund 3 Limited, and The Headland Asian Ventures Fund 2 Limited. Funds advised by Headland have invested in more than 140 companies located primarily in Greater China, India, South Korea and Southeast Asia.

For more information, please visit: www.headlandcp.com

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HSBC Private Equity (Asia) invested its first private-equity fund in 1989 and is investing its fifth and sixth Asian private-equity funds and its second and third Asian venture funds. It raised its sixth private-equity fund The Headland Private Equity Fund 6 L.P, worth $1.34 billion, in 2008, and its third venture capital fund The Headland Asian Ventures Fund 3 Limited, with $230 million in committed capital, in 2009.

In India, HSBC Private Equity, now Headland, had made investments in Sharekhan (acquired by Citigroup), Merittac (acquired by Manipal Group), medical equipment maker Trivitron, software firms NewGen and FINO Ltd and this year in June made investment in Avitel Post Studioz Ltd.

My own updated email is: arunuday@headlandcp.com

Subcriber growth has been robust as ever, with 18-20 mllion new subscribers every month, the highest globally…

but, these have been at ever declining ARPUs.

Competion has been brutal, with India having the highest number of operators anywhere (7-10 per circle compared to a global average of 3-5)…

resulting in a scramble for spectrum.

The end result has been falling tarrifs…

leading to a fall in gross revenues for the industry as a whole, and telecom stocks taking a pounding on the bourses.

Few other parameters make the plot even more interesting. First, if all the existing competition is not adequate, there are newcomers getting ready to enter the market. Second, the operators have paid a whopping $15 bn as fees for 3G spectrum. Third and perhaps most important, the government is working on bringing in mobile number portability (MNP). With most subscribers (me included) being thoroughly dissatisfied with the quality of calls, MNP will probably result in a huge churn in customer base, as subscribers would be free to experiment with other operators without fear of losing their existing numbers. There could not be a better conflunce of factors for a complete overhaul of an industry, and when one of the size and scale of telecom gets reconfigured, there are going to be some serious winners and losers. The real interesting subplot for PE/VC investors such as ourselves is not what will happen to the operators themselves, but all the action that is happening with the ancillary players. Remember the Acme Telepower story of the previous era, which went from nothing to a reported $3 bn valuation in a matter of 3 years by just cornering the AC shelters market. Given the heavy reliance that Indian operators place on outsourcing partners (a highlight of the aforementioned innovative operative model), we could well see a few Acmes emerging from the next phase of the telecom story as well. These will be the ones who will be successful in anticipating the problems that operators will face going forward (of which there will be many as evident from the above stats) and have effective solutions addressing them. Expect us to strive towards identifying and backing at least one such potential company going forward.

With this, James Savage, a director at HPEA, will join the board of Avitel, said a company statement. Standard Chartered–STCI Capital Markets Ltd acted as the sole financial adviser in the transaction.

Avitel has raised the fund to expand its business as it plans to utilise the capital to establish an export oriented unit for animation and post production services, as well as scale up its existing facilities catering to the domestic film and advertising markets. The company also plans to recruit around 300 professionals in the next two years.

Avitel launched its operation 35 years ago, and currently has a strong presence in the domestic post production market, focusing both on feature film and advertising industry. The domestic post production and visual special effects industry in India is estimated at Rs 1,000 crore, and is expected to grow at a CAGR of 18% over the next 3-5 years, added the statement. Avitel is also planning an initial public offering (IPO) over the medium term.

Besides post production activities, Avitel also offers film archiving and restoration services for clients in both domestic and export markets. The company is currently working with the Information and Broadcasting (I&B) Ministry of India, and some other overseas television channels for library restoration.

Avitel has also recently diversified into the animation market, and has been developing an animation project with a British film production company, including creative and pre-production for the overseas markets.

Pradeep Jain, chairman, Avitel Group, said, in the statement, “With animation work orders worth Rs 150 crore in hand, we plan to recruit around 300 professionals in the next two years in areas of script writing, direction, production set-up, production pipeline design, animation skills and management, to match the timeline for our global projects.”

Alok Gupta, director and head of Venture Investment at HPEA, said, “The management team has demonstrated great operational skills in building a robust and diverse business model. We intend to support Avitel in its growth and expansion plans through our network and reach in other Asian markets.”

HPEA is the Asian private equity arm of the HSBC Group. It advises both expansion capital and buyout focused private equity funds as well as venture funds. While the private equity funds focus on mid-market expansion capital and buy-out transactions in Asia, the venture funds focus on small and mid-sized technology and consumer focused companies.

For, as you peek from the 124th floor of this 160 floor 800 odd meter engineering marvel (which is where the observatory is located), you can’t help notice the vast stretches of unoccupied desert land all around. Which begs the question – is there a need at all for such monstrously tall buildings in this place? I mean, if it were New York or Hong Kong, where space is a constraint, one can understand, but Dubai? And while the tower itself is both awe inspiring and elegant, again, it gives the impression that its tall for the sake of being tall and has more resemblance to a television tower than an actual office building. In the words of my colleague who was accompanying me, “its all one big macho game.” And the other striking feature of the city is the number of fountains that are there. Apparently, the water lost in evaporation from all the fountains every day would be enough to fill many large swimming pools. Talk about a water starved desert. History has been consistent in chastening those who have put showmanship over economics and its been no different this time with the consequent debt crisis. Dubai has a genuine scope for becoming the regional gateway for an important and wealthy part of the world on lines of a Hong Kong or a Singapore provided sound economic reason doesn’t go out of the window and oneupmanship take its place.  Hope the city manages to keep its tryst with destiny.
And by the way, for those who plan to make a visit to the Burj, make sure you book the tickets a day in advance. Or, you could be moaning like a couple of Australian tourists who I met, who had to shell out AED 400 per head for an immediate entry as opposed to AED 100 otherwise. The personnel manning the counters apparently told them that the tickets were sold out. But, the thin attendance at the top said a whole different story.  

“The current round will help us meet the demand both at the back end like servers and the front end like biometric cards,” said Rishi Gupta, CFO of FINO. HSBC and Intel have also purchased the entire stake of Legatum Ventures, which invested in March 2007.

“Legatum has exited at a far higher price than their entry,” said Gupta, without divulging the details of the transaction. HSBC has invested through its wholly owned subsidiary HSBC Asian Ventures Fund 3.

FINO is expecting to breakeven this fiscal year and is eyeing an initial public offering (IPO) in next couple of years. It plans to invest the funds in implementation of two big projects – Rashtriya Swasthya Bima Yojana and National Rural Employment Guarantee Act (NREGA). Both of these programs are now being developed electronically and under contract from Central Government.

Besides the PE investors, other shareholders in FINO are ICICI Bank, ICICI Lombard and Institute for Financial Management and Research (IFMR). The public sector investors include Life Insurance Corporation of India (LIC), Union Bank, Corporation Bank and Indian Bank.

FINO already has 8 million customers and expects to add another 7 million by the end of this financial year. The company is also targeting the unbanked population of India, where it expects 500-600 million people are financially excluded. FINO plans to reach 25 million customers and expand its business correspondent network to over 25,000 locations in the next 3 years.

“The new equity in FINO has come at an opportune time when Financial Inclusion is being seen not as desirable but as a necessity for growth and stability of social fabric in the country,” said Manish Khera, CEO of FINO.

The book “Irrational Exuberance” has a chapter that deals with the impact of the emergence of dedicated business news channels like CNBC on stock market valuations. It notes that as business TV channels brought the stock markets to the drawing rooms of households they went from being the preserve of finance professionals to a matter of interest for the common man and as a result all of a sudden, there was a huge surge in retail stock participation leading to a recalibration of valuation benchmarks. Many finance professionals, who didn’t perceive this ongoing dynamic and viewed the high valuations in traditional light lost money on shorting the market. So, the point is that the ripple effects of such media frenzy are not trivial. They could have some serious bearing on the way the markets and even economies function. Another interesting book released recently related to a similar topic is “Blinded by Optimism”, which discusses how inordinate optimism and relentless encouragement of positive thinking in the US has turned people into unrealistic dreamers and worked against real American interest.

Coming back to the point on the banality of media reporting in India, the sad part is that unlike other major global markets, the market leader in India (who I don’t wish to name, but should be easy to guess) itself suffers from a syndrome of exaggerating our own accomplishments (by our, I mean India’s). Actually, it goes a step further – it is their stated editorial policy to mostly report “feel good news”. As an example the said media house recently reported as headline cover page news that a commerce graduate in India had secured an analyst job in an investment bank in London for a salary of $69k p.a. To lift a contemporary phrase from popular lingo as response to this – “Dude, gimme a break!” Is this really worthy of headline news in a national newspaper? An Analyst job in an investment bank in an advanced country is akin to a s/w job in an IT company in India. While it is somewhat sought after, it is not exactly headline worthy. I mean, guess what impression you’d have of a country where you land and see newspapers screaming that someone there had been recruited as a programmer in TCS. In similar vein, the frenzied manner of reporting issues by the leading newspapers in India, especially when it comes to favorable news like GDP growth leaves a lot to be desired. The ball-by-ball commentary on b-school placements that the media indulges in being another example of the same penchant. And India is somewhat unique in that respect. Think WSJ in US or FT in London, who have yet maintained a some gravity in their reporting in contrast to most of Indian media, which mostly seem to play to the galleries. Do I mean to suggest that the healthy growth GDP growth in India not be highlighted – “No”. But, what we could do with (much) less of is this whipping of frenzy stuff and the “now we are bust, now it is rock-n-roll” business.