Reliance Venture to close 3-4 deals in 6 months

By Janaki Krishnan and Bharghavi Nagaraju

MUMBAI (BestGrowthStock) – Reliance Venture Asset Management, the venture fund arm of the Anil Ambani-controlled Reliance ADAG Group, plans to close 3 to 6 deals in six months with a total investment of about $50 million, a top official told Reuters.

A unit of Reliance Capital (RLCP.BO: ), the venture firm has already closed two deals this year, Chief Executive Harshal Shah said in an interview late on Thursday. Funded internally by group companies, Reliance Venture has so far advised and invested in about 11 firms for more than $4 billion.

Shah declined to name the firms he was targeting but said logistics and telecom ancillary services sectors were interesting while bubbles were building in microfinance and educational sectors.

“There is a lot of dumb money going into these sectors. It is not that the sector has to be hot. The returns have to be hot.”

“I would much rather put my money into a business which is generating an investment return that is substantial than just go into a sector just for the sake of it,” he said.

It has invested about $100 million in 11 firms, including Indian travel portal Yatra.com, which was among its earliest investments, and California-based network services firm Stock Inc.

The firm, which has yet to exit any of the ventures it has incubated or invested in so far, may look at a share listing for Yatra.com, in which it invested in 2006.

“An IPO (initial public offering) is something we are looking at,” said Shah.

Venture financing, which had witnessed a slide in 2009, is expected to pick up again this year, with a return in investor sentiment, he added.

“I think 2010 is going to be one of those years recorded in history as one of the good years to invest in. It will be one of those years when people will be cautious but are willing to go back into the market.”

According to data from Venture Intelligence, in 2009 venture capital firms invested $475 million over 92 deals, a fall of about 43 percent from the $836 million invested by venture funds in 2008.

Venture investments started to show a surge in the last quarter of 2009, coinciding with an upturn in the economy.

In the first quarter of 2010 venture capital investments accounted for 16 deals, Venture Intelligence data showed.

Investing Research

(Editing by Sunil Nair)

Reliance Venture to close 3-4 deals in 6 months