New Enterprise Associates buys 40% in HFCL Infotel for Rs. 375 crores

US-based private equity firm New Enterprise Associates (NEA) has acquired a 40% stake in HFCL Infotel for Rs. 375 crores. The deal has been signed and the transaction is likely to close in the next few weeks. The deal values HFCL Infotel at around Rs. 950 crores. HFCL Infotel offers CDMA-based wire-line, fixed wireless and mobile services in Punjab.

The Silicon Valley-based NEA has over $8.5 bn under management. It is one of the oldest and largest venture firms in the world. NEA had been scouting for buys in India and has opened an office in Bangalore and more recently, in Mumbai (read press release). In February 2006, it created an Indian arm, NEA-IndoUS Ventures with plans to invest $150-200 mn in India.

HFCL Infotel was being eyed by several PE funds wanting a slice of India’s telecom action. It is a loss-making unit of Himachal Futuristic Communications Limited (HFCL) incurred a loss of Rs. 25.6 crores during the quarter ended September 2006 and had accumulated losses of Rs. 70.25 crores, resulting in negative net worth of Rs. 8.54 crores.

The promoters now own 62% in HFCL Infotel, private corporate bodies hold just over 30% and 2.51% is held by the public. The private component is held between seven entities — Masita Capital Services, August Trading, IDBI (with the largest share with a little over 12% stake), Oriental Bank of Commerce, MKJ Enterprises, Mantu Housing Projects and Micro Management.

Read The Economic Times article.
New Enterprise Associates to buy 50% stake in HFCL Infotel

NEA-IndoUS Ventures invests in India

NEA-IndoUS Ventures has made two investments in India. The firm has put in money in the proposed Indian operations of US-based mobile payments company Obopay and personalized search engine firm Minekey, which was incubated in IIT-Kharagpur. NEA-IndoUS Ventures is being led by Vinod Dham, of Intel Pentium fame, and Silicon Valley serial entrepreneur Vani Kola. While financial details on the investments were not given, sources said that they run into a few million dollars.

The investments have been made from the India specific fund currently being raised by the firm, reportedly in the $105-150 mn range. It is partnering with US VC firm New Enterprise Associates (NEA) in branding and sharing of best practices. The two will also partner for joint investments in BPO / KPO large deals.

The investment focus of the fund will be on technology and IT-enabled services for early and mid stage companies, in sectors like mobile services, digital media and content, telecom & enterprise, BPO/KPO, semiconductor, software products & services, education, engineering design services and healthcare. A majority of the investments would be in $1-10 mn range.

Read The Economic Times article.

New Enterprise Associates to buy 50% stake in HFCL Infotel

New Enterprise Associates (NEA), a US-based private equity firm, may buy up to 50% of HFCL Infotel, a listed cellular service provider arm of HFCL. The stake is estimated to be valued at Rs. 350 crores. The company may reportedly go for a preferential allotment to allow NEA to pick up to 50% stake in the company.

HFCL Infotel offers CDMA-based services in Punjab, including fixed-line, fixed wireless terminal, and digital mobile services. As of November-end, HFCL Infotel had about 327,000 subscribers. The company also provides leased line services and PCO services. The company is estimated to have an enterprise value of $230-250 mn (including a debt of about $80 mn). As per the current shareholding, the promoters hold 62% in HFCL Infotel, private corporate bodies hold just over 30% and 2.51% is held by the public.

NEA has been scouting for buys in India. The company plans to invest $125-175 mn from its recently-closed $2.5 bn fund. Recently, it also created an Indian arm, NEA IndoUS, which is raising a $150 mn fund ($30 mn provided by NEA) to primarily put into start-ups here.

Read more in The Economic Times article.