| India's fortune-hunters believe their new-found love for biofuel will pay off.
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| India's well-known investors who are known for their Midas touch have spotted an opportunity in bio-fuel, betting big on ethanol, bio-mass and even bio-fuel equipment makers in India and other parts of the globe.
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| Billionaires Rakesh Jhunjhunwala, C Sivasankaran, Vinod Khosla, founder of Sun Microsystems, and Nemish Shah, the media-shy joint partner of Enam Financial Services, are investing in bio-fuel makers quietly, expecting that bio-fuel will have a big play in the coming years as the world looks for a viable alternative to the fast depleting oil reserves.
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| Jhunjhunwala, who is known for his ability to spot a multi-bagger at a very early stage, recently invested in Hyderabad-based bio-fuel firm Nandan Biometrics.
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| He is also a 10 per cent stakeholder in Praj Industries, which is a bio-fuel technology provider and equipment maker.
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| “Bhai (as Jhunjhunwala is known in market circles) is bullish on biofuel and the broad alternative energy space. He is looking at several unlisted companies for more investments,” said a source.
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| Vinod Khosla, the founder of Sun Microsystems and a leading green fuel investor through his Khosla Ventures, holds a minor stake in Praj Industries.
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| But, Khosla, who is scouting for more investments in India, is playing a high stakes game in Brazil.
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| He has backed Brazilian Renewable Energy Company (Brenco) and also made investments in Segetis, founded by former Soviet scientists Sergey and Olga Selifonova, to develop renewable chemical products.
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| C Sivasankaran, who sold his stake in mobile phone company Aircel to Malaysian conglomerate Maxis Communications for over $1 billion, has set up “E85 Inc”, an ethanol producing company in Raleigh, North Carolina, investing $200 million late last year.
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| “Alternative energy, broadly, is an area which we are excited about as an investment opportunity,” said Rahul Bhasin, managing director, Barings Private Equity, which has invested in Auro Mira Energy, a wind energy company.
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| Market sources say Nemish Shah, who spotted multi-baggers Sesa Goa and Infosys when everyone was looking the other way in the early 1990s, is also making quiet moves in biofuel companies in India, both listed and unlisted.
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| Sources say little known IKF Technologies, which is entering bio-fuel production in a big way, has come on his investment radar.
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| A listed company, IKF Tech recently sought government leases for a total of 150,000 hectares of land in Swaziland, Mozambique and South Africa to cultivate jatropha to produce biofuel.
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| “There are several factors that can make India successful in the alternative energy space: availability of natural resources, cost-effective engineering and manufacturing talent and high cost of importing traditional fuels,” said Arun Natarajan of Venture Intelligence, a PE tracking firm.
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| “While I do not see alternative energy posing a threat to sectors that are traditional favourites with investors — like IT & IT-enabled services and manufacturing — any time soon, there is definitely a strong interest in this sector,” he added. |
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